January 2012 • Vol

JANUARY 2012 • VOL. 28 • NO. 01 • $9.90

p. 26 p. 54 features 26 SPECIALTY CITRUS: MARKET AND MERCHANDISE TO SWEETEN SALES With plenty of new varieties hitting the market, retailers should take the time to educate consumers cover story with plenty of signage and smart marketing techniques. 21 HELPING HANDS: “BROKER 34 CLAMSHELL MARKETING: SAVING MONEY BY REDUCING SHRINK NETWORKS” DELIVERING VALUE Be it berries, potatoes or apples, clamshells are proving their worth and showing up all over the Retailers and manufacturers increase their produce department. reliance on sales and marketing agencies. 41 MEXICAN GROWTH AND OPPORTUNITY commentary New developments in products, logistics, and market positioning allow for expansion of successful relationships and business-building with Mexico. 8 THE FRUITS OF THOUGHT Weighing In On Immigration 48 MERCHANDISING PEPPERS: TASTE THE RAINBOW The popularity of peppers continues to grow, as consumers experiment with a variety of colored 78 RETAIL PERSPECTIVE peppers, and minis, too. Disparities 50 MATURE ORGANIC CATEGORY CONTINUES TO GROW 80 EUROPEAN MARKET As more traditional supermarkets bring organic produce into the mix, these departments are A Focus On Flavor And An Aligned refining merchandising strategies. Supply Chain (Part I of II) 54 SIX WAYS TO COOK UP MORE PROFITS THIS WINTER WITH MUSHROOMS in this issue Play to every demographic with smart marketing, tasty demos and powerful POS. 4 THE QUIZ 58 MAINTAIN A-PLUS APPLE SALES AFTER THE FIRST OF THE YEAR Controlled-atmosphere apples are a welcome addition to the winter produce department. 6 WASHINGTON GRAPEVINE 65 MAXIMIZING CHILEAN WINTER FRUIT SALES PRODUCE WATCH 12 Combining good merchandising basics with creativity and research can add up to a profitable 14 RESEARCH PERSPECTIVES Chilean winter season. 15 COMMENTS AND ANALYSIS departments p. 70 16 TRADE SHOW CALENDAR MERCHANDISING REVIEWS 82 INFORMATION SHOWCASE 70 Tropicals Earning Their Place In The Sun Attention-grabbing displays and educating BLAST FROM THE PAST 82 consumers are two key points to selling more p. 58 tropicals. DRIED FRUIT AND NUTS 75 Peanuts: An American Tradition Supply challenges will keep processors and retailers on their toes to ensure the crop stretches through the year and still provides consumers with value. special features 18 FROM THE PAGES OF THE PERISHABLE PUNDIT Auditing And Food Safety: California Agencies Weigh In On Cantaloupe Crisis Change Service requested: POSTMASTER: Send address changes to PRODUCE BUSINESS, P.O. Box 810425, Boca Raton, FL 33481-0425. PRODUCE BUSINESS (ISSN 0886-5663) is published monthly for $58.40 per year by Phoenix Media Network, Inc., P.O. Box 810425, Boca Raton, FL 33481-0425.

JANUARY 2012 • PRODUCE BUSINESS 3 PRODUCE QUIZ

THIS MONTH’S WINNER Tom Egler JANUARY 2012 • VOL. 28 • NO. 01 • $9.90 Produce Buyer P.O. Box 810425 • Boca Raton • FL 33481-0425 Phone: 561-994-1118 • Fax: 561-994-1610 Supervalu [email protected] New Stanton, PA Tom Egler has been at to look forward to in the business.” Supervalu for nine years, Egler notes that locally grown is defi- PRESIDENT &EDITOR-IN-CHIEF James E. Prevor where he works as a pro- nitely popular in the areas he works. “Dur- [email protected] duce buyer, and is respon- ing summer — August, mostly — everyone sible for procuring all fresh clamors for local, home-grown crops. It’s a PUBLISHER/EDITORIAL DIRECTOR produce for the Eastern region, which big deal up here, so we make sure to have Ken Whitacre encompasses around 150 stores. home-grown blocks in our ads.” [email protected] While Egler’s experience at Supervalu is Egler keeps abreast of trends in the SPECIAL PROJECTS EDITOR far-reaching, he has actually been in the pro- industry. “We read PRODUCE BUSINESS monthly Mira Slott duce business for nearly 30 years. “I started at the warehouse,” says Egler, who has [email protected] right out of high school as a produce man- been getting the magazine for “quite some ager in a local supermarket, and have been time.” He adds, “It makes the rounds ASSISTANT EDITOR Jennifer Leslie Kramer doing it ever since,” he says. “It’s a fun busi- through everyone’s desks in the office. The [email protected] ness to be in, and it’s healthy! It’s always staff always finds great merchandising tips, changing and there’s always something new and it’s fun to read about the markets, too.” CIRCULATION MANAGER Kelly Roskin How To Win! To win the PRODUCE BUSINESS Quiz, the first thing you have to do is enter. The rules are simple: Read through the articles and advertisements in this issue to find the answers. Fill in the blanks corresponding to the [email protected] questions below, and either cut along the dotted line or photocopy the page, and send your answers along with a business card or company letterhead to the address listed on the coupon. The winner will be chosen by drawing from EXECUTIVE ASSISTANT the responses received before the publication of our March issue of PRODUCE BUSINESS. The winner must agree to sub- Fran Gruskin mit a color photo to be published in that issue. [email protected]

PRODUCTION DIRECTOR WIN AN ICELESS WINE CHILLER Diana Levine The electronic wine chiller is a must-have for wine enthusiasts. Using [email protected]

advanced thermoelectric technology, the tabletop wine chiller cools or PRODUCTION LEADER warms wine to the optimal temperature. A backlit LED screen displays cur- Jackie Tucker rent and target serving temperatures, and a quick chill feature brings your wine to the ideal temperature fast. PRODUCTION DEPARTMENT SUNSHINE GORMAN FREDDY PULIDO

QUESTIONS FOR THE JANUARY ISSUE TRADE SHOW COORDINATOR Jackie LoMonte 1) Name three of the “Partners In Research” for the Center for Produce Safety. [email protected] ______CONTRIBUTING EDITORS ______Meredith Auerbach, Carol Bareuther, Melinda Goodman, Bob Johnson, 2) What 2012 Bowl Game is the Chilean Hass Avocado Committee sponsoring? ______Jodean Robbins, Barbara Robison ______ADVERTISING Eric Nieman, Associate Publisher 3) What is the fax number for LGS Specialty Sales Ltd.? [email protected] Sandy Lee 4) Name three apple varieties harvested in New York’s Apple Country? [email protected] ______Bill Martin [email protected] 5) Where in California is Prime Time Produce located? ______Colleen Morelli [email protected] Ellen Rosenthal 6) Who is in charge of international sales at Southern Produce Distributors Inc.? [email protected]

______FLORAL DEPARTMENT MARKETING E. Shaunn Alderman [email protected] Send insertion orders, payments, press releases, This issue was: ❏ Personally addressed to me ❏ Addressed to someone else photos, letters to the editor, etc., to PRODUCE BUSINESS, P.O. Box 810425 Name ______Position ______Boca Raton, FL 33481-0425 PH: 561.994.1118 FAX: 561.994.1610 Company ______PRODUCE BUSINESS is published by Phoenix Media Network, Inc. James E. Prevor, Chairman of the Board Address ______P.O. Box 810425, Boca Raton, FL 33481-0425. Entire contents © Copyright 2012 City ______Phoenix Media Network, Inc. All rights reserved. Printed in the U.S.A. State ______Zip ______Publication Agreement No. 40047928 Phone ______Fax ______Photocopies of this form are acceptable. Please send answers to: JANUARY QUIZ PRODUCE BUSINESS • P.O. Box 810425 • Boca Raton, FL 33481-0425

4 PRODUCE BUSINESS • JANUARY 2012

THE FRUITS OF THOUGHT

WEIGHING IN ON IMMIGRATION

By James Prevor President & Editor-in-Chief here is little doubt that immigration is service restaurants, such as Chipotle, as full service restaurants are more the great issue that will determine the labor intensive. Tshape of the produce industry’s future. The produce trade’s efforts have primarily been focused on extri- It is widely acknowledged that production cating produce issues from the immigration mess and getting a separate depends heavily on illegal immigrants, and guest-worker program. It would be a neat trick if it could be pulled off. the recent “Silent Raids” on Chipotle have The problem, of course, is that a guest-worker program for agriculture shown how important illegal immigrants are doesn’t solve Chipotle’s problem, and so it is difficult to build a coalition to the customer base. strong enough to pass such a bill. Which is why it hasn’t happened. Yet immigration reform is one of the most There is a substantial argument that we should allow much larger difficult issues to resolve. Part of this is legal immigration. In the end it is reasonable to assume that a larger, because of a breakdown in trust. Over the years, there have been many younger population will create a country better able to maintain its immigration laws and many initiatives to block entry for illegals. Yet, in preeminence in the world and also it is reasonable to assume that a more the end, there has been no serious and sustained effort on the part of the preeminent country is better able to protect its interest in the world and Federal Government to enforce the law. As a result, compromise with thus to prosper. those looking to restrict immigration or those looking to ensure all There are several problems with this approach: First, it is a big- immigrants are legal is almost picture, long term perspective and impossible. That is why we have thus hard to sell politically. more than ten million illegal Immigration is such a complex and Second, legal immigration would aliens in the country. important subject that we will either have to expand significantly for it What many politicians don’t to bring a lot of workers to areas seem to realize is that the various reach a new consensus on the kind of such as produce harvesting as initiatives such as whether illegal America we want to have, or we will legal workers have more options aliens ought to get drivers licenses muddle through with the existing laws. for employment. Third, the long or in-state college tuition perplex term benefit of immigration citizens because if government depends heavily on the immi- officials know that someone is grants being a productive and here illegally, the expectation is that they will call the police and have civic-minded force in society. Many who have no ill will toward immi- them detained, not that they will register them for school. Indeed Rick grants feel that the culture in the United States has changed in such a way Perry’s campaign for the Republican Presidential nomination has floun- that we are unwilling to demand this of immigrants. dered, partly because Mitt Romney took an obscure issue related to Part of this is financial — a fear that immigrants will take benefits Governor Perry’s willingness to provide in-state tuition to illegals and such as Medicaid or food stamps. Part of it is cultural — that the United promoted that until Governor Perry no longer seemed a viable option States is unwilling to have educational and other policies to encourage for many conservatives. a melting pot, such as mandating English. The President’s focus on raiding businesses such as Chipotle is a way This is why the trend in policy in this area is to encourage more legal of playing both sides of the issue. On the one hand, these immigrants are immigration but only among those selected either for their ability to mostly Democratic voters and so the political imperative is to legalize invest or for certain educational credentials. This is really a way of them and get them registered. On the other hand, the unions, an impor- avoiding the question of how do you treat the“huddled masses yearning tant Democratic constituency, want to avoid the competition with to breathe free” by not accepting many who are “tempest-tossed” and, additional labor from other countries. So you have this kind of half- instead, just accepting those who are already successful. hearted effort where they make Chipotle fire the workers – this gets Politically, the issue often focuses on the illegal aliens who are already Unionsupport–buttheydon’tactuallydeportthepeople–thus in the United States, but the Constitution provides a long term solution preserving the future voter base. to that problem. Any child born in the United States is a citizen, so all The reality, of course, is that union protests aside, actually ending illegal aliens will either leave the country or have their family lines even- illegal immigration, unless accompanied by increased legal immigration tually legalized as the older generation dies off. or guest-worker programs, would be a transformational decision. There Normally, industry associations look for narrow ways to promote the would be a substantial reduction in the availability of low wage workers, interests of their industry, but it seems that immigration is such a and this would lead to many changes, including a shift of production complex and important subject that we will either reach a new consensus agriculture to outside the country. Although Chipotle’s Co-CEO Monty on the kind of America we want to have, or we will muddle through Moran was recently the subject of a Wall Street Journal profile that with the existing laws. Details aside, there is a choice between an aging focused on his efforts to have Washington “Fix Immigration,” one and smaller country and a younger, growing and more dynamic society. suspects that restrictions on illegal aliens would probably benefit quick- Let us hope the industry weighs in on the right side of that choice. pb

8 PRODUCE BUSINESS • JANUARY 2012

The Times, They Are A Changing Prepare For Food Safety Rules

By Ray Gilmer Vice President of Communications

roduce food safety changes are safety since 1998. safety plan,” said Dr. David Gombas, United’s Pcoming. One year after passage of The free online tool, developed by Fami- senior vice president for food safety. the FDA Food Safety Modernization lyFarmed.org with funding from USDA’s Risk “Presented in a ‘Turbo Tax’ format, opera- Act, regulators are finalizing rules that will Management Agency, helps growers design a tions can answer a series of questions and change the way we do business. customized manual to meet GAP certification generate a food safety plan and recordkeeping The first quarter of 2012 promises to see a requirements and mitigate business risks by that will get them started in the right direc- flurry of discussions among produce industry tion. We are happy to see the On-Farm Food stakeholders about the FDA’s new proposed Safety tool developed around the Produce rules. United Fresh is already coordinating GAPs Harmonized Standards, which will help with other industry groups to develop operations prepare for audits using those comments to regulators about the proposed industry-developed standards.” rules. Making sure the regulations are work- FamilyFarmed.org’s On-Farm Food Safety able and true to the intent of Congress will be Project coordinates with the Produce GAPs a top priority for United Fresh. Harmonization Initiative, spearheaded by Industry stakeholders are talking about United Fresh, by basing their online tool on private industry standards, too. Audit require- the Harmonized Standards, better ensuring ments and product testing are often part of that growers’ food safety plans will align with doing business these days. industry standards and audit expectations. The food safety bar is getting higher. Are United Fresh is coordinating with several you ready? audit organizations, including GlobalG.A.P, to Help is on the way. In December, Dr. David ensure consistency in use and interpretation of Gombas, United Fresh Senior V.P. for Food the Harmonized Standards. United has worked Safety & Technology, joined Agriculture to blend 13 different GAP standards, including Deputy Secretary Kathleen Merrigan, along USDA AMS GAP/GHP, the AFDO Model with leaders from food and agriculture organ- Code for Produce Safety, and GlobalGAP’s izations, to introduce a free online tool to help Integrated Farm Assurance standards. U.S. producers achieve Good Agricultural Prac- “The Harmonized Standards are an effort tices (GAP) certification. The goal is to help “We are happy to see the On-Farm Food to reduce audit fatigue and confusion by ensure that farms are producing fruits and Safety tool developed around the Produce achieving industry agreement on the audit vegetables in the safest way they can. USDA’s GAPs Harmonized Standards, which will standards for on-farm operations, and then help operations prepare for audits using GAP audit verification program, administered those industry-developed standards.” maintaining consistency in expectations by a by USDA’s Agricultural Marketing Service, — David Gombas, United’s Sr. Vice continuing open and transparent dialogue provides a roadmap to minimize risks of President for Food Safety across the industry, including USDA and microbial food safety hazards. While not based FDA,” said Gombas. on the new FDA food safety law, USDA’s volun- answering just a few questions. It is available Check out the United Fresh website at tary audit based program verifies adherence to at www.onfarmfoodsafety.org. www.unitedfresh.org and click the food safety the recommendations made in the Food and “The On-Farm Food Safety tool promises links on the home page to learn more about Drug Administration’s Guide to Minimize to be a great resource to operations that don’t the new law and regulations. Now’s the time Microbial Food Safety Hazards for Fresh Fruits have the food safety resources or background to learn how you can keep your company and Vegetables, which has set the path for food to write and implement a successful food ready for the new food safety standards.

10 PRODUCE BUSINESS • JANUARY 2012

PRODUCE WATCH

TRANSITIONS ANNOUNCEMENTS BROOKS PRO*ACT TROPICALS Monterey, CA LLC Kelly Jacob Homestead, FL has been Brooks hired to the Tropicals management welcomes Peter team in the newly created GRUSZKA CONSULTING FIRM OPENS Liefermann as Recognizing a need in the market- sales and fruit position of FRIEDA’S vice president place, Philip Gruszka has opened a procurement new venture in consulting. Gruszka has OFFERS NEW director. of retail sales. PINE NUT Jacob is a 25-year veteran of the over 25 years of marketing and sales Liefermann has over 20 years experience in the food and beverage DISPLAY experience in the produce busi- retail industry, and most recently, director of sales with a focus on arenas, including three years interna- SHIPPER ness. Right out of college he tionally at companies such as Frieda’s Inc., started working in the food business development at New Star/Organicgirl in Salinas, CA. Grimmway Farms, Anheuser Busch, Los Alamitos, CA, service industry supplying Ralston Purina and Sara Lee. While has introduced a pine produce to a Georgia chain of While there, she managed existing or created new business at both Gruszka will be heading the firm, he nut shipper to display in pizza restaurants. He has also also will be bringing in other top produce departments. The worked for Cooseman’s national and regional retailers across the United States. She held industry professionals to augment freestanding display is pre- Worldwide, C Brands, J&C product offerings. stocked and easy to Tropicals and Pantai USA. Peter previous sales and business development positions at Fresh assemble, with an eye- lives in Homestead with his wife catching design sure to and two daughters. Express/Chiquita, M&M Mars and Fleming Foods. CRUNCH pump up pine nut sales for PAK OFFERS retailers. The newly designed shipper holds 48 3-oz. HOLIDAY clamshell tubs of pine nuts ANNOUNCEMENTS APPLE-TIZER and includes a recipe tear- PACKAGES pad with two simple usage GREEN MACHINE Cashmere, ideas. Frieda’s recommends Hollandia Produce LLC WA-based that retailers merchandise offers green lettuce Crunch Pak is the shipper next to fresh grown in a green way, offering two tomatoes and basil to inspire hauled by a green truck seasonal Apple-Tizers party trays for customers. It is also great as running on green fuel. winter holiday eating occasions. The a secondary display in non- With the addition of its new state-of-the-art tractor-trailer truck that runs Apple-Tizers party trays come in two produce sections. In addition on natural gas, the Carpinteria, CA-based family farm has taken its combinations of fresh-cut fruit and dip: to the shipper, the 3-oz. commitment to sustainability on the road. Coupled with a trailer cooled the Hearty Party and the Grand Crunch clamshell tub is a new retail by a hybrid electric refrigeration unit, the delivery rig is nearly as green & Munch, and have a suggested retail pack size for Frieda’s. This as its sustainably grown contents. Emerald green in color, the Peterbilt price of $11.99 to $12.99. The themed convenient container is also tractor features an efficient compressed natural gas (CNG) engine that packaging is designed with a red resealable, making it easier lowers total carbon emissions. The truck is so environmentally friendly it holiday bow or a football. for consumers to keep fresh. was recognized by the Environmental Protection Agency’s Smart Way program. Plus, its aerodynamic design boosts fuel efficiency up to 12 percent and reduces drag 24 percent.

USDA NAMES MEMBERS TO GLOBAL BERRY NATIONAL MANGO BOARD GROWER The National Mango Board, in TACKLES $35 Orlando, FL, has four new BILLION members and two returning PRODUCE members. Agriculture Secretary SHRINK Thomas J. Vilsack recently PROBLEM appointed six members to serve on the National Mango Board (NMB). Santa Clara, CA- Meanwhile, at the board’s November meeting, current board members based Intelleflex elected officers to serve in various leadership roles for 2012. The and ProWare appointees include four new members and two reappointed members. Services Greg Golden of Mullica Hill, NJ; Bill Vogel of San Pedro, CA; and Wade announced the Shiba of Missouri City, TX, will serve on the board as importers. Enrique results of a recent pilot program that documented the value of Delivered Sanchez of Nayarit, Mexico, and Bernardo Malo of Samborondon, Ecuador, Freshness and quality of produce by dynamically routing product in real- will serve as foreign producers. Veny L Marti of Guaynabo, Puerto Rico, time based on remaining shelf-life. Intelleflex enables Delivered Freshness will represent domestic producers. Mr. Shiba and Mr. Malo are returning through the use of its temperature monitoring tags that provide action- to the board to serve a second consecutive term. Pictured from left to able data through the use of pallet-level temperature monitoring. This right are the 2012 National Mango Board Officers: Jim Alvarez, vice- solution has a proven ability to help minimize losses and maximize fresh- chairman; Ronnie Cohen, chairman; George Mendez, treasurer; Bernardo ness at the point of delivery. Malo, secretary.

A HAIRY MONTH FOR TEAM SUPERFRESH DURING MOVEMBER During the month of November, Domex Superfresh Growers participated in a male cancer awareness and fund raising campaign called Movember — the name is derived from the common nickname for a moustache, “mo.” During the month, 26 employees and vendors of the Yakima, WA-based company sprouted a mustache and solicited friends, family, coworkers and customers to contribute money toward the research and treatment of prostate cancer. They raised $3,775 and the Kershaw family matched the contribution bringing the total raised for the event to $7,550.

Produce Watch is a regular feature of PRODUCE BUSINESS. Please send information on new products, personnel changes, industry, corporate and personal milestones and available literature, along with a color photo, slide or transparency to: Managing Editor, PRODUCE BUSINESS, P.O. Box 810425, Boca Raton, FL 33481-0425, or e-mail us at [email protected]

12 PRODUCE BUSINESS • JANUARY 2012 PRODUCE WATCH

ANNOUNCEMENTS FRIEDA’S BECOMES THE EXCLUSIVE MARKETER OF MOAB SUPER- SUREHARVEST AND CULTURA TECHNOLOGIES FRUIT JUICE SIGN VALUE-ADDED RESELLER AGREEMENT BLENDS Soquel, CA-based SureHarvest has finalized an VILLAGE FARMS COMPLETES Frieda’s Inc., Los agreement with Cultura Technologies, granting FIRST PLANTING OF NEW GREENHOUSE Alamitos, CA, has them the rights to market, sell and implement Vancouver, BC, Canada-based Village Farms Interna- signed a multi- Cultura Technologies ExtendAg labor manage- tional has completed planting of 15 acres of its new year exclusive sales and distribution ment and harvest trading software nationwide. 30-acre greenhouse in Monahans, TX. The remaining agreement with MOAB Superfruit Juice The two entities have integrated SureHarvest’s 15 acres will be planted this month. In the final Blend. The MOAB line of pure fruit Farm Management System and ExtendAg. The stages of completing the greenhouse and support juices includes three proprietary blends: ExtendAg labor management and harvest structures, it will be fully operational prior to the Açai, Pomegranate and Wild Blueberry. tracking apps are designed for companies that initial harvest in late February. The Monahans green- MOAB Superfruit Juice Blends, which deploy large to medium-sized labor crews in the house will provide year-round supply and enhance stands for Most Optimum Antioxidant field for various cultural or harvest activities. The Village Farms product offerings for its existing Beverage, are 100 percent pure juices system meets the needs of growers, farm customer base. with each featured “superfruit” as the managers and labor contractors who require first ingredient. MOAB has been tools to capture information in the field simply marketing 32-oz. bottles for two years and efficiently for tracking employee productivity and is now launching a consumer and fully automating the payroll process. STEAM BAG SURPRISE friendly 10.5-oz. bottle. INSIDE EACH BAG OF PETITE POTATOES M&Q Packaging Corp., Schuylkill Haven, PA, has provided its MQ36 dual-ovenable steam bag as a key component in Agrow Fresh’s “Simply Season & Steam” fresh petite red potatoes. Consumers like the idea of steaming vegetables because they see it as healthy, and VAL VERDE VEGETABLE UPDATES IMAGE having a steam bag included in each bag of small- Val Verde Vegetable Co. recently launched a new NEW YORK APPLE GROWERS sized fresh potatoes provides convenience. At meal- corporate identity, expanded product lines and made UNVEIL QR CODES time, just open the MQ36 bag, fill it with potatoes equipment upgrades. As part of several company- Fishers, NY-based New York Apple and seasonings, close the bag using the plastic tie wide changes, Val Verde, headquartered in McAllen, Association (NYAA) is promoting a provided, and pop into the microwave for 12 TX, is proud to introduce a new logo that that epito- new retail program that allows minutes. The potatoes are steam-cooked to a tender mizes the iconic red and green of the past image consumers using smart phones to and creamy texture with no cleanup required. with modern styling. In addition to a facelift for the scan QR codes on point-of-sale company image, new box strapping equipment has cards to get instant information been added to improve the safety and efficiency of about New York apple varieties NEW PRODUCT its packing line. Finally, the production department is right from the produce aisle. The expanding product lines and upgrading acreage with new POS material contains promi- NEW PURITY ORGANIC a state-of-the-art drip irrigation program, which nent QR codes, which link to online “HEIRLOOM BLEND” allows for better water management and improved videos that show how New York FINGERLING crop quality on specialty items. apples are grown, packaged and POTATOES delivered. Purity Organic Produce of NEW PRODUCTS San Francisco, CA, (formerly Pacific Organic Produce) launches a new MAXWELL CHASE TECHNOLOGIES product this season — “Heirloom Blend” organic LAUNCHES NEW “FRUIT POP” POUCHES fingerling potatoes — to celebrate over a decade of Atlanta, GA-based Maxwell Chase Technologies launched a new working with Cinacia Farm. The “Heirloom Blend” is a line of “Fruit Pop” pouches. The absorbent pouches are ideal trio of Cinacia’s best-selling organic fingerling pota- for packing slices of fresh cut pineapple, cantaloupe, water- toes: the Russian Banana, the Ruby Crescent and the melons and honeydew melons, and the pouches offer over 10 rare Purple Peruvian. Cinacia is one of the few days of shelf-life. The pouches are made with food-safe growers of certified organic Purple Peruvians in the absorbent technology, allowing processors to pack ripe and sweet tasting fruit. The new United States. Each bag of Purity Organic fingerlings pouches are easy to open, tamper-evident and have no messy dripping. Target markets are from Cinacia is hand-packed. kid’s snacks, school lunches and convenience stores.

BROOKS TROPICALS NOW CHRISTOPHER RANCH OFFERING PASSION FRUIT OFFERS ROASTED GARLIC Brooks Tropicals of Homestead, FL, has added Gilroy, CA-based Christopher Ranch passion fruit to its premier line of tropical fruits offers Monviso Roasted Garlic. Each and vegetables. Grown in the Redlands farming eco-friendly, resealable bag of Monviso area just south of Miami, FL, these passion fruits Peeled Roasted Garlic contains all- come in beautiful shades of pale-pink, red and natural, California-grown prepped and lavender. Passion fruit grown in Florida are generally ready-to-use garlic. The freshly peeled larger with softer skin and available year-round with cloves have been slow roasted until golden brown and are bursting with volumes peaking in February, June and September. rich, nutty flavor that comes alive with gentle reheating. Chefs’ Collec- Inside, the fruit has intensely aromatic yellow-green pulp wrapped tion Crimini Mushroom and Roasted Garlic Soup (pictured) and other around crisp seeds. Although ready to eat when picked, the passion fruit recipes are available on the company’s website, which also provides a will sweeten as it wrinkles. year-round resource for garlic product, promotion and recipe updates.

JANUARY 2012 • PRODUCE BUSINESS 13 RESEARCH PERSPECTIVE National School Lunch Program Shows Promising Progress

BY USDA’S FOOD AND NUTRITION SERVICE

Editor’s Note: In September, 2011, the USDA’s Food by which schools are assigned to participate in and Nutrition Service (FNS) published its first FFVP. Specifically, the FFVP legislation and interim report on the progress of the nation’s School FNS guidance require that available FFVP Lunch Program. The following is an excerpt of the funding be allocated to the poorest schools in Because children report, which is available in its entirety at each state that applied for the program, where http://www.fns.usda.gov/ora/MENU/Pub- povertyisdefinedbythepercentofstudents in low socio- lished/CNP/FILES/FFVPInterim.pdf eligible for free or reduced-price school lunch economic status he Fresh Fruit and Vegetable Program (FRPSL) in the previous school year. (FFVP) aims to increase fruit and veg- The RD design estimates impacts by com- households are Tetable consumption among students paring schools immediately above and below more likely to in the nation’s poorest elementary schools by the funding cutoffs in each of a nationally rep- providing free fresh fruits and vegetables to resentative sample of states. The final preferred have the lowest students outside of regular school meals. FFVP analytic sample included 4,696 students in 214 intakesoffruits began as a pilot program in 2002 and was con- schools within 2.5 percentage points of the verted into a nationwide program in the Food, funding cutoff in each state: 2,225 students in and vegetables, Conservation, and Energy Act of 2008, also 99 FFVP schools just above the funding cutoff, increasing fruit known as the 2008 Farm Bill. FFVP funds are and 2,471 students in 115 non-FFVP schools allocated at a level of $50 to $75 per student just below the funding cutoff. and vegetable perschoolyear,orbetween$1and$2perweek The study collected information on student intakes in this “to schools with the highest percentages of food intake using diary-assisted 24-hour recall low-income students, to the maximum extent interviews. In FFVP schools, the diary was population even practicable.”Initial funding was $40 million for completed on a day on which FFVP fruits by small amounts the 2008-2009 school year, rising to $65 mil- and/or vegetables were offered to students, lion, $101 million, and $150 million in the allowing us to estimate the impact of FFVP on is likely to confer a following three school years, allowing more intake on FFVP days. health benefit. schools to participate in each year. The 2008 Farm Bill also required the Secre- Findings tary of Agriculture to conduct an evaluation of The results indicate that FFVP increased the program in order to determine “whether average fruit and vegetable consumption the range observed in various other interven- children experienced, as a result of participating among students in participating schools on tions to increase fruit and vegetable in the program — (A) increased consumption FFVP days by approximately one-quarter of a consumption in school children.Although there of fruits and vegetables, (B) other dietary cup per day. This represents an increase of 15 is no standard consensus as to what constitutes changes, such as decreased consumption of less percent over fruit and vegetable consumption a meaningful change in fruit and vegetable nutritious foods; and (C) such other outcomes levels in the absence of FFVP. intake, it is generally accepted that children with as are considered appropriate by the Secretary.” No increase in total energy intake was the lowest intakes are at greatest risk of poor The results presented in this interim report, found. If an increase in total energy (caloric) health outcomes, and that the greatest benefit for the 2010-2011 school year, focus on the intake had been found, we might have been would be conferred by increasing intakes of total quantity of fruits and vegetables con- concerned that FFVP could contribute to fruits and vegetables among this group. sumed and total energy intake (also referred to weight gain. Instead, increased fruit and veg- In this context, the fact that FFVP targets as total caloric intake), allowing the assessment etable consumption appears to have replaced poorer schools is potentially significant. Because of whether any additional fruit and vegetable consumption of other foods. children in low socio-economic status house- consumption was in addition to, or in place of, holds are more likely to have the lowest intakes other foods consumed. Conclusion of fruits and vegetables, increasing fruit and veg- An increase in fruit and vegetable consump- etable intakes in this population even by small Methods tion of one-quarter of a cup per day is within amounts is likely to confer a health benefit. This evaluation estimates the impact of FFVP using Regression Discontinuity (RD), The Food and Nutrition Service (FNS), formerly known as the Food and Consumer which is considered the strongest possible Service, administers the nutrition assistance programs of the U.S. Department of Agri- culture. The mission of FNS is to provide children and needy families better access design when random assignment is not feasi- to food and a more healthful diet through its food assistance programs and com- ble. The RD approach leverages the procedure prehensive nutrition education efforts.

14 PRODUCE BUSINESS • JANUARY 2012 COMMENTS & ANALYSIS

Is An ‘Exchange Effect’ Taking Place?

BY JIM PREVOR, EDITOR-IN-CHIEF, PRODUCE BUSINESS

ne can only be pleased that this leaves open the possibility that the children’s research indicates that, at least under annual produce consumption did not change Osome circumstances, giving away at all or, for that matter, even went down. free produce manages to boost produce con- We don’t know a lot about produce consumption. One can only be disappointed that sumption and its motivators. If we give it only does so by a quarter cup per day on the children free apples on Wednesday, this might Only looking at the day the free produce is distributed. This study serve as a sampling tool and get the children doesn’t go into cost/benefit analysis, but one excited about apples. They might, therefore, actual date the free suspects that it will be difficult to prove that a eat more apples than had they never been produce is distributed 1⁄4 cup increase in produce consumption on given the free apples. It is, however, also pos- certain days really reduces health care costs sible that children have a kind of natural set leaves open the sufficiently to justify the expenditure. point for certain foods to avoid boredom. So possibility that the The study seems to have a significant flaw if given their druthers, the children might in its design. The key line is this: enjoy oranges three times a week. If given children’s annual pro- The study collected information on student some in school, they may not eat oranges on duce consumption food intake using diary-assisted 24-hour recall Sunday. interviews. In FFVP schools, the diary was com- One reasonable supposition might be that did not change at all… pleted on a day on which FFVP fruits and/or the nature of the free produce distributed vegetables were offered to students, allowing us might have a real impact on the overall effect. to estimate the impact of FFVP on intake on If the produce distributed is, for example, FFVP days. composed of novel items the students have The problem is, of course, that by limiting not tried before — either new varieties of well the study to days in which free fruits and veg- known items such as apples or completely etables are distributed, you open the new items — one might expect a greater long- items in general? The thought might be the possibility that what we are seeing is actually term sampling effect. However, this might school is now providing the produce so an “exchange effect.” Think of it this way: result in less short term consumption as some we can spend the family budget on meat imagine that, mindful of your health, you children will reject the novel items. or shoes. decide to limit yourself to one Big Mac each Quality would quite probably have an What about during school breaks? Does week and, typically, you go to McDonald’s on impact as well. We would love to see some the distribution of free produce in school cre- Wednesday to eat it. The other six days of the research on how students perceive the quality ate fans for produce or does it create a mental week, you go to McDonald’s and eat a salad. of what they are given. If the apples purchased association with a burdensome environment Now imagine that McDonald’s promotes Free are nice and crisp, and the schools maintain and lead children to want to avoid the prod- Big Macs on Tuesday. proper refrigeration, the sampling effect may uct during summer vacation? Quite probably you would switch your Big promote produce consumption. If the apples We just don’t know. This is all speculation, Mac Day to Tuesday from Wednesday to take are low quality and/or the schools don’t but it is reasonable speculation and it is not advantage of the promotion. Now if McDon- maintain an optimal cold chain and the addressed at all by this research. The key ques- ald’s studies its Tuesday customers – “The day apples turn out to be mealy, the sampling tion, quite obviously, is not whether on the on which free Big Macs were offered” — one effect may turn negative. days we give away fresh produce does produce will think it had a successful promotion, i.e., Anotherareawedon’tknowmuchabout consumption increase. The key question is: If the promotion increased consumption of Big is the impact of free food distribution in we follow a free produce distribution of X fre- Macs because it would observe that the cus- school on parental purchases. If you know quency in the schools, what is the impact on tomers who used to buy a salad on Tuesday that your child gets free apples every day, does children’s annual produce consumption? nowbuyBigMacs. that make a budget-stressed parent buy more This is a fairly obvious point, and the fact But that would be a deceptive interpreta- apples or buy fewer? Indeed, especially if one that the study was designed as it was makes tion of the success of the promotion. In fact, thinks of produce purchases for children as one suspect that the bureaucrats chose a study the promotion did not increase Big Mac con- being motivated by parents’ desire to see their design that would tend to support their ini- sumption at all. It just switched dates of children eat healthy – might not the knowl- tiative rather than give us valuable consumption. edge that the children are getting their information on the impact of free distribu- With the USDA’s study, only looking at the “medicine” in school lead parents to shift tion of produce on children’s produce actual date the free produce is distributed spending to other foods? Maybe to other consumption.

JANUARY 2012 • PRODUCE BUSINESS 15 FORWARD THINKING

JANUARY 15 - 17, 2012 Berlin, Germany NASFT WINTER FANCY FOOD SHOW Phone: (493) 030-382048 The37thWinterFancyFoodShowistheWestCoast’slargest Email: [email protected] specialty food and beverage event. Website: www.fruitlogistica.com ConferenceVenue: Moscone Center,San Francisco,CA Conference Management: NASFT, New York, NY MARCH 1- 3, 2012 Phone: (212) 482-6440 • Fax: (212) 482-6459 SOUTHERN EXPOSURE Email: [email protected] Topromote the consumption of fresh fruits and vegetables in Website: www.fancyfoodshows.com Florida,Georgia,Alabama,Mississippi,Louisiana,Tennessee, North Carolina, South Carolina, Kentucky and Virginia January 16 - 17, 2011 through good fellowship, cooperation and mutual interest NJDA/VGANJ CONVENTION among its members. The 2012 New Jersey StateAgriculture Convention will be held ConferenceVenue: TampaConventionCenter,Tampa,FL in conjunction with the State Vegetable Growers Convention Conference Management: Southeast Produce Council Inc., the week of January 16. East Ellijay,GA ConferenceVenue: Taj Mahal,Atlantic City,NJ Phone: (813) 633-5556 • Fax: (813) 653-4479 Conference Management: NJDA/VG Email: [email protected] Phone: (609) 439-2038 • Fax: (609) 826-5254 Website: www.seproducecouncil.com Website: www.nj.gov/fAgriculture March 14 - 16, 2012 January 18 - 20, 2012 WORLD FLORAL EXPO TPIE - TROPICAL PLANT INDUSTRY EXPOSITION ConferenceVenue: Jacob K Javits Convention Center, The Tropical Plant Industry Exhibition (TPIE) is the trade event New York, NY showcasing the latest trends in foliage, floral and tropicals in Conference Management: HPP Exhibitions, Amsterdam, warmandinvitingSouthFlorida. The Netherlands Conference Venue: Broward Convention Center, Phone: (312) 066-22482 Fort Lauderdale, FL Email: [email protected] Conference Management: FloridaNurseryGrowers& Website: www.worldfloralexpo.com Landscape Association,Orlando,FL Phone: (407) 295-7994 • Fax: (407) 295-7994 March 21 - 23, 2012 Email: [email protected] AMERICA TRADES PRODUCE CONFERENCE 2012 Website: www.fngla.org FPAA hosts the 2012 America Trades Produce Conference in SouthernArizona January 18 - 20, 2012 ConferenceVenue: RioRicoResort&TubacGolfResort,Rio PMA FIT LEADERSHIP SYMPOSIUM Rico,AZ This two-and-a-half-day program is designed for decision Conference Management: Fresh ProduceAssociation of the makers who currently drive strategy and growth in an organ- America,Nogales,AZ ization.TheSymposiumaddressestoday’sleadershipPhone: (520) 287-2707 • Fax: (520) 287-2948 challenges from unique global perspectives and formulates Email: [email protected] innovative strategies. Website: www.freshfrommexico.com ConferenceVenue: Omni Dallas Park West,Dallas,TX Conference Management: Produce Marketing Association, March 29 - 31, 2012 Newark, DE PRODUCE FOR BETTER HEALTH Phone: (302) 738-7100 • Fax: (302) 731-2409 ANNUAL MEETING Email: [email protected] ConferenceVenue: Monterey Plaza Resort & Spa,Monterey,CA Website: www.pma.com Conference Management: Produce for Better Health Foundation,Hockessin,DE January 22 - 24, 2012 Phone: (302) 235-2329 • Fax: (302) 235-5555 SWEET POTATO CONVENTION Email: fruitsandveggiesmorematters.org California Sweet Potato Council,the main national organization Website: www.pbhfoundation.org for the promotion and marketing of sweet potatoes, hosts the 50th Annual United States Potato Convention. APRIL 11 - 13, 2012 ConferenceVenue: St. Regis Resort, Dana Point, CA CANADIAN PRODUCE MARKETING ASSOCIATION Conference Management: CaliforniaSweetPotatoCouncil, Theannualconventionandtradeshowprovidesauniqueoppor- Livingston,CA tunity for industry leaders to connect with peers and enhance Phone: (209) 394-7311 • Fax: (209) 394-4232 business opportunities in Canada,while also offering an excep- Email: [email protected] tional combination of education and networking opportunities. Website: www.cayam.com Conference Venue: StampedeParkBMOCentre,Calgary, Alberta,Canada January 24 - 26, 2012 Conference Management: Canadian Produce Marketing HOTEL, MOTEL & RESTAURANT Association,Ottawa,Ontario Canada SUPPLY SHOW SOUTHEAST Phone: (613) 226-4187 • Fax: (613)226-2984 ConferenceVenue: Myrtle Beach Convention Center Email: [email protected] Myrtle Beach, SC Website: www.cpma.ca Conference Management: Leisure Time Unlimited Inc., Myrtle Beach, SC April 19, 2012 Phone: (843) 448-9483 • Fax: (843) 626-1513 NORTHERN CA EXPO Email: [email protected] Since 1965, the Fresh Produce & Floral Council has been Website: www.hmrsss.com providinguniquenetworkingandbusinessgrowthopportu- nitiesforprofessionalsintheproduceandfloralindustriesin FEBRUARY 8-10, 2012 California. FRUIT LOGISTICA ConferenceVenue: Alameda Fairgrounds,Pleasanton,CA Theworld’sleadingtradefairforthefreshfruitandvegetable Conference Management: FreshProduce&FloralCouncil, business. La Mirada,CA ConferenceVenue: Berlin Exhibition Fairgrounds Phone: (714) 739-0177 • Fax: (714) 739-0226 Hall 1- 25,Berlin,Germany Email: [email protected] Conference Management: Messe Berlin GmbH, Website: www.fpfc.org

To submit events to our Forward Thinking calendar, please email [email protected] 16 PRODUCE BUSINESS • JANUARY 2012

Auditing And Food Safety: California Agencies Weigh In On Cantaloupe Crisis

FROM JIM PREVOR’S PERISHABLE PUNDIT 01.04.2012

ow that the “cantaloupe crisis” has passed — though not they are decertified from the programs and buyers are without significant costs to the trade and a horrid death toll informed. For LGMA, buyers are notified directly of the Nof 30 — it is important to reflect on lessons learned. We decertification action and the company’s name is posted on wrote extensively about the cantaloupe crisis and have received an the LGMA website. CTF customers have online access to audit important letter from the leadership of two organizations at the history and compliance. This level of transparency is also a forefront of industry food safety efforts. crucial element of a food safety program. Many of the scenarios regarding industry food safety efforts For any food safety program to be successful, it must evolve. have revolved around the question of audits and what is reasonable And to do that we must listen to what our customers are saying for the world to expect from audits. So we were very pleased that — constantly. Jointly, our members have conducted food safety this joint letter was from two men involved with innovative efforts tours for buyers, and we have personally met with customers to to use audits successfully as part of food safety programs: hear how we can do better; we have attended food safety Jim, thank you for your very thoughtful analysis of the summits, seminars and meetings throughout the country. tragic Colorado listeria outbreak. We felt it was appropriate And what we’ve heard is that buyers want rigorous for us to take a moment to share what we’ve learned over the industry-wide standards, quality auditors inspecting last five years of our programs’ existence. First, an audit and operations and they want transparency — but they also want score are only one piece of any overall program. A continuous improvement and refinements in each of those comprehensive program should instill a culture of food safety that permeates throughout an entire operation. And, to your point, Jim, that really begins with a rigorous Many retailers would prefer to set of industry-wide standards developed through a transparent and inclusive process. Verifying compliance comes always buy the best stuff next through announced and unannounced audits. In the case produced under high food of both the California Tomato Farmers and the California Leafy Greens Marketing Agreement, those announced and safety standards,but unannounced audits are mandatory for our members and competitive retailers buy cheap conducted by USDA-certified government auditors, not private auditing companies. stuff and consumers accept We want to be clear that we are not saying our auditing systems are perfect, and we are constantly working with USDA the product, thus creating to refine and improve these systems. But, what we are saying competitive pressure to both is that our members strongly believe that the government auditors are ideally positioned to conduct effective and buy and sell cheap. independent food safety audits, as neither the buyer nor the seller hires them directly. The auditors report only to their areas. Both of our programs are working hard to deliver these government supervisors. Most importantly, if these auditors attributes to buyers. As the Perishable Pundit has already identify an imminent health risk during an audit, he or she is pointed out, the next step in the evolution of food safety in required to inform local, federal or state health authorities of the produce industry is for procurement divisions to recognize the situation. and accept these comprehensive systems. Another aspect of a comprehensive program is a system for — Ed Beckman, President, California Tomato Farmers handling corrective actions. For both CTF and LGMA, any — Scott Horsfall, President and CEO, California Leafy member who does not pass every facet of the audit must take Greens Marketing Agreement corrective actions to not only correct violations but to enact We appreciate this letter and think it important as it raises measures to prevent their reoccurrence. Follow-up audits eight key points: validate these corrective actions. 1) An Audit Is Not Enough In some cases, we have been criticized for allowing We received so many calls from consumer media suggesting members to “retake the test” until they pass. That’s not that the idea that a firm passed an audit and yet still had a food accurate. We require necessary improvements in their food safety issue was somewhat incredulous. This incredulity makes safety practices with all employees and contractors focused no sense as almost all food safety outbreaks involve audited firms on achieving across-the-board compliance. Again, this helps because the vast majority of industry volume is audited by create a culture of food safety throughout an operation. somebody for something. For members who fail to achieve 100 percent compliance, Obviously if a firm or its employees do food safety just to pass an

18 PRODUCE BUSINESS • JANUARY 2012

FROM JIM PREVOR’S PERISHABLE PUNDIT 01.04.2012 audit, they will not do a lot of important things when the auditors will have job security and thus be willing to be tough, whereas a aren’t watching. Therefore the game is clearly to change people’s private auditor may have fears about being displaced — although motivations from “passing the test” to “doing the right thing.” there is a lot of political theory about how private interests capture regulatory bodies and bend them to their will. 2) Industry-Wide Standards Properly Developed A prerequisite for any successful audit scheme is that the 5) Corrective Action standards against which the audit are done must be meaningful One of the big flaws with audits is that the corrective action and acceptable. This letter argues that they best be industry-wide mechanism is deeply flawed. Although some companies use standards as well. audits as self-assessment tools and work hard to make sure they There are many reasons to think this point is true. Most are doing everything right, the Jensen Farms cantaloupe situation notably that it creates a level playing field for producers and for clearly shows the need for an automatic mechanism to force retailers. Many producers in the world don’t want to stint on food corrective actions. safety, but they feel compelled to avoid costs because their The requirement that everyone score 100 percent on an audit competitors don’t incur them and buyers will still accept the is a good start. Completely aside from the substance, the product. requirement to get 100 percent is a way of building a culture that Many retailers would prefer to always buy the best stuff says that compromises on food safety are not acceptable. produced under high food safety standards, but competitive Of course, we are still not certain this is enough. Many of the retailers buy cheap stuff and consumers accept the product, thus flaws identified in Colorado were not the subject of an audit. For creating competitive pressure to both buy and sell cheap. example, there was no requirement to have a pre-cooling facility. Buyers still can’t look at an audit, see the producer got 100 percent and assume that nothing else can be done. That is not often the case.

Maybe the real lesson of the 6) Transparency What happens if someone fails an audit or gets a low score or Cantaloupe Crisis is that since gets comments? This needs to be immediately communicated to such food safety outbreaks all buyers and be available to all prospective buyers. So many buys today are program buys that run through continuous affect everyone in the business, replenishment models. Audits must be circulated in such a way the mechanisms we use to deal that a computer will stop these programs as result of a problem. with them need to encompass 7) Continuous Improvement not only the large well- Obviously, audit metrics can’t remain static as science advances. Note, though, that the Europeans and programs such capitalized players but smaller as GFSI seem to prefer stability over continuous improvement.

more regional players — like 8) Procurement Jensen Farms in Colorado. None of this, of course, matters if it doesn’t impact the behavior of the actual buyer.

3) Announced And Surprise Audits These are all more than valid points for consideration, but it is It is an open secret in the industry that people prep when they worth noting that both of these organizations, California Tomato know the auditor is coming. This is not so terrible as it gives a Farmers and California Leafy Greens Marketing Agreement, have moment in time for everyone to take stock and make sure several advantages. As state-focused organizations, they have a everything is up to snuff. It is, however, obviously not sufficient. relatively homogenous environment to consider and they both Although true “surprise” audits are rare — and we note that have a concentrated industry to support their efforts. Ed and Scott use the term “unscheduled” in their letter — the The California cantaloupe industry does not have the same fact that an auditor might show up at any time is useful in structure — government auditors, etc. — but it has had few food keeping people on their toes and in building a food safety culture. safety issues. And neither the CLGMA or CTF would have protected their 4) USDA-Certified Government Auditors industries against a problem with leafy greens or tomatoes from This is a controversial point. Do government auditors produce Colorado. better food safety outcomes than private auditors? The research The Leafy Greens effort was expanded to Arizona and there on this subject is scanty. It is not obvious to us that if the CLGMA, is an effort afoot to make it national. for example, chose to hire Primus auditors that the audits would Maybe the real lesson of the Cantaloupe Crisis is that since be worse or that food safety would decline. such food safety outbreaks affect everyone in the business, the Still, one can see the appeal. The government is somewhat of a mechanisms we use to deal with them need to encompass not neutral standard whereas different people have different opinions only the large well-capitalized players but smaller more regional about different auditing organizations. The image of people denying players — like Jensen Farms in Colorado. access to government officials seems less credible than denying a Many thanks to Ed Beckman and Scott Horsfall for weighing private business, and the assumption is that the government auditor in on such an important industry issue.

20 PRODUCE BUSINESS • JANUARY 2012 HelpingHelping Hands: Hands: “Broker“Broker Networks” Networks” DeliveringDelivering Value Value

PHOTO COURTESY OF EDGE SALES & MARKETING Retailers and manufacturers increase their reliance on sales and marketing agencies. BY JULIE COOK RAMIREZ

or most consumers, little, if any, Sales & Marketing LLC, based in Foxbor- like you to consider representing our bagged thought goes into the time, expertise ough, MA. “It’s a delicate balance and it makes salads as we introduce them to the market- and funding that goes into planning, for an interesting dynamic.” place,’” says Stephan. acquiring and staging a produce While CPG companies have been on In the two decades that followed, brokers’ Fdepartment. In fact, it’s safe to say board with brokers for decades, the produce role in the produce industry grew substantially, most people take for granted that the products industry came to the concept rather late in the as manufacturers/suppliers and retailers alike they desire will be there when they want them. game. In fact, it was only with the advent of came to rely on them to provide a wide array of What they don’t realize is the business of packaged salads some 20-odd years ago that services and support. Since 1990, Salinas, CA- getting products into stores is a carefully brokers were brought into the produce scene based Mann Packing Co Inc. has utilized choreographed dance. Everything has to come at all. “That was really the genesis of the brokers for everything from category manage- together in the right place at the right hand, industry because the packaged salads were ment to re-shelving to store level execution of and there are a number of people involved in UPC-driven and there was a need for retail promotions and headquarters’ support, making it happen. coverage,” explains McGowan. “It was a big according to Lorri Koster, vice president of For decades, the Consumer Packaged move for companies like Dole and Fresh marketing and co-chairman of the board. Goods (CPG) industry has relied on brokers Express to go that way." “Brokers are playing a larger role because a to help place, promote and manage their prod- Michael Stephan knows firsthand what a lot of these companies are cutting back on the ucts at store level. These experts work on “big move” it was for Dole to begin enlisting help that they have,” acknowledges Bill behalf of a manufacturer or supplier to sell and the services of retail brokers. Currently director Weimer, president and CEO of O’Mara Sales support particular products, usually in a of sales for the central and Eastern regions at & Marketing, headquartered in Cliffside Park, specific region of the country. They are the Watsonville, CA-based Monterey Mushrooms NJ. “They allow the brokers to get involved middlemen who strive to keep both sides of Inc., Stephan spent eight years, from 1991 to and take care of a lot of the work that needs to the equation happy — the manufacturers, 1999, running a produce brokerage depart- get done.” whose products they are seeking to place, and ment, with Dole Salads as its initial line. Dole That work includes everything from simply the retailers, who are constantly on the look- then brought him onboard to manage its bringing product to the attention of retailers to out for products that will meet the broker network. “When Dole Vegetables first intensive in-store support. According to Weimer, expectations of their customer base. started enlisting the services of retail brokers his company helps develop sell sheets, shelf “We have to balance the needs of our in 1991, the company approached the busi- talkers and price tags and works with retailers on clients with the needs of our customers and nesses that had been representing its sister where to merchandise product. He also coordi- work between those two extremes,” says Bob company, Dole Packaged Foods, and said, ‘Are nates demos for in-store sampling events. McGowan, client team leader at Advantage you involved in produce? If you are, we would Likewise, ESM/Ferolie Metro NY, based

JANUARY 2012 • PRODUCE BUSINESS 21 “We don’t own any products, we don’t warehouse it, we don’t ship it, but we are their sales force. We provide efficiencies that they could not have if they had hired their own sales force." — Bob McGowan, Advantage Sales & Marketing LLC

in Montvale, NJ, offers a full spectrum of serv- possible internally. However, Stephan says ices through a three-pronged approach. there are specific instances in which a broker’s According to produce director Terri Abrams, assistance is invaluable. “They provide an enor- the company utilizes business managers, who mous amount of value to us in markets where strategically plan with manufacturers to create we just can’t commit the resources because we optimum programs and continued brand don’t have a huge market share or business to building; account managers, who call on the support it or we just can’t navigate our way trade; and a team of retail representatives around the independent natures of those Abrams dubs ESM’s “soldiers on the street.” marketplaces,” he details. “In the right market, She says they bring ESM full-circle at the it can be the most efficient money you spend.” store level, working on merchandising, new Irwindale, CA-based Ready Pac Produce item cut-ins, tag intensity, pre-selling and Inc. primarily deals with brokers who have display-building. been hired to support the private label prod- “Brokers fill in the gaps in the supply ucts it supplies to retail customers, according chain,” says Bruce Peterson, president of to Michael Celani, senior vice president of Peterson Insights Inc., located in Bentonville, sales and marketing. In those instances, the AR. “They do a lot of things that either end retailers rely on brokers for a “full portfolio of of the supply chain may not want to do inter- services.” He adds, “A given customer may nally. They may not have the ability to do it or want the broker to do everything from cate- they may not want to put the resources against gory management to working with their it to do it.” suppliers, representing them on further Advantage’s services range from repre- analysis of the category, new product develop- senting new products and engaging in ment, quality benchmarking, packaging and promotional planning to category manage- graphics. Obviously, we interface with them, ment and plan-o-grams, to financial matters supplying our interpretation and recommen- such as invoice processing and production dations. They really help us day-in and day-out management. “We don’t own any products, we to make sure that we are in total alignment don’t warehouse it, we don’t ship it, but we are with the customer, in terms of private label their sales force,” says McGowan. “We provide strategies in the categories we supply them.” efficiencies that they could not have if they had On the branded side, Ready Pac’s broker hired their own sales force.” usage has traditionally been “fairly limited,” For some manufacturers, especially small according to Celani. That’s because the regional players, hiring their own sales force is company engaged in direct selling and main- not an option in the first place. The only way tained its own merchandising force. More they can get their products into the retail recently, however, Celani says the company has setting — and have them managed properly increased its reliance on brokers, primarily once they are there — is by utilizing the serv- when it comes to “tactical, in-store execution” ices of a broker. “A lot of [our clients] these in smaller markets where “it’s not likely you guys don’t have the resources to have their own have as much business to warrant either having direct sales teams, retail merchandising teams somebody reside there or travel there.” and category management skill sets, so that’s a Specifically, Ready Pac looks to brokers to big part of our business,” explains Lee ensure that products are on the shelf, put up Deminski, president of Deminski Van Valken- tags, inquire about the cause of out-of-stocks, berg, a produce-specific broker headquartered put up POS information, and ensure in Corona, CA. schematic integrity. In some instances, the Naturally, some manufacturers utilize company even looks to brokers to help them brokers more than others. Monterey Mush- get their products into new markets. “It’s really rooms, for example, relies on brokers in a been in the last five years that we’ve used them limited capacity, simply because it is the much more on the merchandising side,” says company’s culture to handle as much as Celani. “We also rely on brokers sometimes

22 PRODUCE BUSINESS • JANUARY 2012 800-223-8080 • 718-991-5900 www.darrigony.com “They provide an enormous amount of key decisions. “In today’s environment, where valuetousinmarketswherewejustcan’t information technology is being used more readily in the produce department than ever commit the resources because we don’t have before, I’ve seen it go from a relatively unso- a huge market share or business to support phisticated gut-feel business to one that is very much managed through category analysis and it or we just can’t navigate our way around a better understanding of the role of fact-based the independent natures of those information in making the right kind of decisions,” says Flippin. marketplaces... In the right market, it can be According to Stephan, the flow of infor- the most efficient money you spend.” mation from supplier to retailer can also be — Michael Stephan, Monterey Mushrooms Inc. greatly enhanced through the use of brokers. With brokers on-site in the stores every one to when we are looking to penetrate a new product and to purchase other synergistic prod- three weeks, that provides the ideal opportu- market where geographically and relationship- ucts across the store, that can be very effective,” nity to communicate seasonal messages, “so wise, it makes more sense to use a broker than says Flippin. “We’ve seen some very strong lifts everybody understands what the focus is.” In to hire a direct person.” generated by some of these larger promotions.” the summer, for example, that message may be While some brokers specialize in produce that it’s time to push portabellas since they play — or manage produce-only divisions — the EYES AND EARS a tremendous role in boosting incremental majority of brokers represent a wide variety of One of the broker industry’s biggest selling sales during BBQ season. categories. That can be extremely beneficial in points is its ability to provide local market “As with any business, there are so many terms of building cross-promotions — a full expertise. Because they typically hail from the cost pressures that we can’t afford to wastefully meal solution, complete with pasta, pasta regions in which they work, brokers bring a spend sales and marketing dollars,” says sauce, grated cheese, a bagged salad and salad deep knowledge of the specific consumer base Stephan. “If we have a promotion that doesn’t dressing, for example. they serve. That allows them to essentially be get executed at store level, it’s a waste of our With 65 locations throughout the United the eyes and ears of the market, an invaluable money and a waste of the retailer’s time.” States and Canada, Jacksonville, FL-based resource for their clients. “Living in the Acosta Sales and Marketing is one of the market, we just by default know the INFORMATION EXCHANGE largest full-service brokers in the consumer customers,” says McGowan of Advantage. The economy has certainly played a role in packaged goods industry. Working across the “That enables us to serve them very well.” the growth of the broker business, as many grocery channel, Acosta represents more than Monterey Mushrooms’ Stephan agrees: retailers have found themselves trying to do 1,000 CPG companies. Through its fresh “They know the lay of the land, the consumers, more with less labor in their stores. As a result, foods platform alone, Acosta manages a and the competitive landscape,” he says. “That they are increasingly relying on brokers for number of categories — meat, bakery, deli, and brings a tremendous amount of value to the retail support. Kings Supermarkets, an upscale produce — that tend to call the perimeter of business relationship that can’t be replicated retailer based in Parsippany, NJ, has a “great the store home. That gives Acosta tremendous with sales managers who are handling four or relationship” with its brokers, according to power in terms of coming up with strategic five states.” Paul Kneeland, vice president of produce and cross-merchandising initiatives. “With the Brokers also have the ability to give voice floral. In addition to relying on its brokers for breadth and depth of portfolio that we have, to smaller companies that otherwise would not new product introductions, Kings also depends we have the capability of putting together the be able to garner an audience at the grocery on them to bring data from Chicago-based types of promotions that really drive level. While their offerings have been shown Information Resources Inc. to their attention. consumers from department to department,” to enhance overall produce sales, Flippin says The brokers then assist them in mining and says Jerry Flippin, national client services and smaller companies often find it difficult to managing that data as Kings strives to figure business development director for fresh fruits secure time with key decision-makers during out what products they should — or shouldn’t and produce. “We basically manage the entire which they could extol the virtues of their — be carrying. “They are vital in providing scenario from the inception of ideas all the way products. By aligning themselves with a information to help us position our depart- through to execution.” broker, they are able to enjoy the same benefits ments to grow sales,” says Kneeland. According to Flippin, retailers are increas- as a major vendor. “That’s where we really Pleasanton, CA-based Edge Sales & ingly recognizing that price alone is not enough shine because we have the ability to take Marketing conducts business reviews for many to generate the kind of traffic they need to see multiple lines in at one time,” says Flippin. of its clients, although the nature of the review in their stores. As a result, they are looking to “We are able to get the details they need to see varies depending on the size and sophistica- “alternative means by which to promote prod- in front of them without spending too much of tion of the client, according to Brad Raffanti, ucts.” Produce managers, in particular, are their time on one individual item. That’s an president and owner. “We go in and talk about keenly interested in promotions that will drive important service.” the state of the business — what’s working, traffic across different channels of the business A number of factors have driven the trend Best Practices, things like that,” he says. “If the and ultimately sell more produce. toward full-service brokers in the produce business is not as sophisticated, we don’t have “If we can generate ideas and promotions that industry. Among the most significant have to do a business review every quarter or as ultimately send consumers back to the produce been the advent of category management and comprehensive a business review, but the char- department, both to purchase a particular the increasing reliance on technology to drive acteristics of what we do are pretty similar

24 PRODUCE BUSINESS • JANUARY 2012 “In today’s environment, where with that,” says Casey.“However, it’s not always information technology is being used in our best interest to ask a chain to consider taking in a product if we suspect it might not more readily in the produce department work for them. We have to walk a fine line than ever before, I’ve seen it go from a between manufacturer and our customer base, remembering that honesty and transparency relatively unsophisticated gut-feel business are what will win out in the long run.” to one that is very much managed through “You just have to accept that there are some things that just don’t work for some retailers,” category analysis and a better understanding says Deminski of Deminski Van Valkenberg. of the role of fact-based information in “Instead of promoting failure, we try to take making the right kind of decisions.” the high road whenever we can.” — Jerry Flippin, Acosta Sales & Marketing CHALLENGES ABOUND Despite the increasingly important role across the board.” with our strategy so we have credibility with that brokers are playing throughout the Monterey Mushrooms, meanwhile, relies the customer,” he asserts. “I don’t want to be produce industry, there remains a general sense on Johnson O’Hare ( JOH), a Billerica, MA- working with somebody just for short-term of confusion with regard to exactly what these based full-service broker, to attend every one gain if it doesn’t really make any sense.” talented individuals do. When many people of the company’s business reviews with its Likewise, a good broker continually keeps hear the term “broker,” they mistakenly think retailers. Not only that, but JOH actually does its retail customers’ best interests in mind when the discussion is about commodity brokers much of the review work for those meetings. seeking out new products to bring to their who buy and sell goods, says Monterrey’s “If there are analytics we can get from IRI or attention. According to Kneeland, Kings’ Stephan. “The association with brokers is the Nielsen, we will help put together the presen- brokers are “very supportive of the brand, very guy who buys a railcar load and then divvies it tation and certainly present the new items supportive of the strategy.” Together, they out into pallet quantities or truckload quanti- from the manufacturers we represent,” says build a mutually beneficial relationship that ties to the different distributors in the terminal Tom Casey, executive vice president and ensures the retailer is never pressured to take market,” says Stephan. “I think brokers have regional director of JOH’s produce division. on products that are not in line with what their an opportunity to change their identity.” “It’s just part of staying on top of the business.” upscale clientele would expect from them. “We Advantage’s McGowan also fears the term Occasionally, brokers bring data on such try to dial them in to what we believe so they confuses people. In an attempt to better issues as out-of-stocks to the attention of a don’t waste their time or our time bringing in describe what his industry does, he went so far retailer. While that may result in a less than products that don’t make sense for Kings,” says as to list his profession as “sales provider” on cordial relationship between those brokers and Kneeland. “They understand Kings’ position his badge at the most recent PMA show. “Ever the individual produce managers and store as an upscale niche market, so they are not since the salad business started, people have managers who are being singled out, such going to bring me something that wouldn’t be called us brokers, but the preferred term is sales information can be quite helpful, as it may sold in an upscale niche market.” and marketing agency,” he says. “The business provide invaluable insights into execution at While some retailers would rather not be continues to evolve and ‘broker’ no longer store level. In addition, it can draw produce bothered by brokers, particularly when they are applies to what we do.” directors’ attention to matters that might pointing out faults or drawing attention to Looking ahead, Edge Sales’ Raffanti otherwise have remained below their radar. product that is consistently out-of-stock, expects the produce industry to remain as “There may be a particular SKU that I Kneeland remains a firm defender of the dynamic, rewarding, and challenging as it haven’t done any analysis on in quite some profession. “Every relationship is what you always has been — if not more so. With time and if I get a broker report that says 10 make of it,” says Kneeland. “Brokers may seem competition increasing from alternate chan- stores are out of that item, that may cause me like an intrusion on your time, but if you use nels, like Wal-Mart, Costco, Whole Foods to do some analysis,” says Peterson of Peterson them for the support that they offer, it fosters and Target, and a growing number of retailers Insights. “In that respect, it is drawing my a relationship that helps you grow sales and centralizing their operations — including their attention to something that may have other- helps them grow their sales. It’s really a two- purchasing — that challenges brokers to wise been missed with all the multitude of way street.” continue to add value through a wide array of responsibilities that I have.” With so many new items flooding the sales and marketing support. produce industry every month, it can be “The goal is to stay out in front of it to help IN THEIR BEST INTERESTS tempting to try to get as many chains as the retailers in terms of growing the category While pioneering new items and getting possible to carry the latest and greatest offer- and growing the brand,” says Raffanti. “If you chains to carry them is an exciting proposition, ings. However, the broker business is all about can really add value, you truly have a team that a good broker also understands the value of building strong relationships, says Casey of is professional, and you’ve got all these running the business with integrity. For that JOH. So while it may be possible to convince different aspects from a business management, reason, Raffanti says, Edge actually turns down a retailer to take on a particular product, that from an analytical approach, and from a retail many of the potential new clients who doesn’t mean it’s the best move. “Produce is marketing perspective, you’ll remain a tremen- approach them. “Before we take on a new always coming up with new items and there’s a dous resource for the retailers and for the client, we need to make sure they are aligned genuine sense of excitement that goes along industry as a whole.” pb

JANUARY 2012 • PRODUCE BUSINESS 25 Pummelos and Blood oranges are two examples of specialty citrus that have recently gained a following. Specialty Citrus: Market And Merchandise To Sweeten Sales With plenty of new varieties hitting the market, retailers should take the time to educate consumers with plenty of signage and smart marketing techniques. BY CAROL M. BAREUTHER, RD

onsumers are always looking for 38.4 percent of dollar sales during the same based in Oviedo, FL, explains, “Three to four that “something different.” Like- time period. Mandarins, which include years ago we would have included Mandarins wise, retailers continually search for Clementines and Satsumas, are next at 23.1 and Clementines under the specialty definition that hot new product that will percent of dollar sales. Lemons, which include in that they are something that is managed and Cblacken their bottom line. When it both everyday Eureka and Meyer varieties, seasonal. Today, however, they are mainstays. comes to fresh produce, breeders and growers round out the Top Three dollar share category To me, specialty means more local or regional, are happy to oblige. Just look at varietal devel- contributors at 15.2 percent. like a Florida Navel that you’ll see primarily opment and SKU proliferation in categories Mark Luchak, director of produce and sold in the south. Or, something more limited such as apples, tomatoes and potatoes. Citrus is floral for Rice Epicurean Markets, a 5-store in volume and availability such as a variegated also exploding, and it’s a category that offers chain based in Houston, TX, says, “There’s no pink lemon.” unique marketing strategies and merchan- easy definition because there is so much that is Similarly, Joe LoBue, managing partner of dising opportunities in both niche and newer mainstream today. For example, Cara Cara LoBue Bros. Inc., in Lindsay, CA, says, “We specialty varieties. Navels are getting to be an everyday seasonal break down the citrus category into Navel item. Clementines are pretty much available oranges, Mandarin oranges, lemons and Specialty Citrus Defined and promotable year-round. Even kumquats specialty. Under specialty we include Cara What exactly is specialty citrus? There is no are around for much of the year.” Caras, Moro oranges, Minneolas, Pummelos industry definition. For example, according to On the other hand, David Mixon, senior and grapefruit.” Perishables Group, a West Dundee, IL-based vice president and chief marketing officer for “In Florida, for assessments through the fresh food consulting firm, specialty citrus Seald-Sweet International, headquartered in state agencies, we refer to specialty fruit as a means homli, kumquats and ugli fruit, and Vero Beach, FL, contends, “Specialty citrus is broad category that includes Tangerines and represents only 0.1 percent of category dollar anything that doesn’t qualify as a Valencia or Mandarin hybrids as well as Tangelos and sales for the 52 weeks ending September 24, Navel orange or grapefruit.” Tangors,” says J. Peter Chaires, executive 2011. Navels, Valencias, Cara Cara Navels, Some don’t classify the group of Tangerine, director of the New Varieties Development & Moro or Blood oranges and Temple oranges Mandarin and Clementine varieties as Management Corporation (NVDMC) in are grouped together, and they represent the specialty, while others do. Mark Bassetti, senior Lakeland, FL. “However, for many people, largest slice of the citrus category, contributing vice president of Duda Farm Fresh Foods Inc., specialty fruit is non-tangerine-type fruit —

26 PRODUCE BUSINESS • JANUARY 2012

“Customers are better informed today and very point of distinction over competitors and give educated about the names of different citrus, just consumers a reason to shop at their store. In addition, the more SKUs offered, the better like they are when it comes to apples, and this is a the chance to fit a greater number of shop- selling point.” pers’ needs.” — Mark Luchak, Rice Epicurean Markets New this season, Booth Ranches LLC, in Orange Cove, CA, will be offering a limited volume of Mandarins, in addition to its tradi- orange to gold in color — and generally an or Glen Navels,” he explains. “Secondly, you tional line-up of Navel and Valencia oranges. easy peel type. This crowd would consider have families of similar looking citrus such as Neil Galone, vice president of sales and Tangelos and Tangors specialty fruit. However, Mandarins or Clementines that are merchan- marketing, explains, “Historically, we’ve only it gets more interesting. Now that breeders are dised throughout the season not by individual marketed fruit we’ve grown ourselves. But, our making very interesting grapefruit/Pummelo variety, but under the umbrella of a brand retail customers are looking to add variety with hybrids, and lemon/lime/orange hybrids, we name. Cuties are a good example of this, and I something that offers an incremental sale to will either end up with a larger ‘catch-all’ cate- think we’ll see more of it. The third marketing oranges, so this season we will market about gory, or more individually defined fruit and model is to distinguish each individual by its 100 loads of Mandarins during a 10-week less general families.” own identity like the apple shippers have window from January to April. We’ll be selling done,” he continues. “I believe there is a lot of them under the brand name Buckaroos.” Marketing Opportunities: room for stand-alone and unique varieties of Varietal development at LoBue Citrus is Families And Individuals citrus that have seasonal merchandising focused on new and different varieties of truly The challenge in the future is how to move opportunities and that grower/shippers and seedless Mandarins, says LoBue. “We have new citrus products into the market without retailers will team up to identify and promote some promising trials going and are optimistic confusing the customer. According to Chaires, to their customers.” we can improve upon even the excellent fruit there are three models.“First, is the old model Seald-Sweet’s Mixon agrees. “It’s all about we’re offering today.” of general families where you have Navel individual or niche varieties and windows of “Similarly,” says Duda’s Bassetti, “trials are oranges available for a 7- to 8-month window. opportunities,” he says. “Retail advantages in ongoing in Florida on seedless Clementines.” They are sold as Navels, not as Atwood Navels calling out specific varieties are to offer a “In addition,” says LoBue Citrus’ LoBue,

28 PRODUCE BUSINESS • JANUARY 2012

“while specialty citrus requires some advance this example: “In Florida, there are three main just like they are when it comes to apples, and planning, we think a short window is an tangerines: Fallglo, Sunburst and Honey. Each this is a selling point.” advantage; it brings real energy to the citrus is available in different windows: October for The Minneola Tangelo, also called Honey- category. Throughout the season, retailers can the Fallglo, November for the Sunburst and Bell, and the Sugar Belle are two examples of count on having something new to promote, February for the Honey. Some retailers will popular specialty citrus marketed by varietal and each item brings unique flavor and visual market these as just a Florida Tangerine; others name, says NVDMC’s Chaires. “The Sugar characteristics as strong selling points. Tradi- call out the individual name to differentiate.” Belle is now entering the market from Florida, tionally, specialties do not have to be Luchak, at Rice Epicurean Markets, is one and within a few years, will be produced in discounted. So specialty offers a one-two produce director who directs staff to sign each California. In Florida, the Sugar Belle comes punch: the citrus category gets a nice lift, at of these tangerines by their varietal names. into maturity in early December and can carry pretty good margins.” “Customers are better informed today and very to mid-January. California’s more arid climate The NVDMC’s Chaires agrees and offers educated about the names of different citrus, may extend this window.” Golden Nugget Mandarins and Pixie Tangerines are also well suited to being sold as distinctive. Claire Smith, public relations manager for Sunkist Growers Inc., in Sherman Oaks, CA, says, “The Golden Nuggets and Pixies are high end items with high Brix, excellent flavor and both are 100 percent seedless.” Many retailers, such as Randy Bohaty, produce director for B&R Stores, a 15-unit chain headquartered in Lincoln, NE, are looking for the next best piece of specialty citrus. “The Melo Gold is a real sleeper,” he says. “I think as supplies become steadier, this fruit will catch on with customers.” The Melo Gold is a cross between a white grapefruit and a Pummelo. The seedless lemon will be another future hit predicts Duda’s Bassetti.“I really think this has the potential to take off similarly to seedless grapes and seedless watermelon. It makes a lot of sense. Who wants seeds in their ice tea or fish?” Two of the newest specialty citrus fruits to hit the market are the Sumo Citrus and Jeju Mandarins. This marks the second season that the Suntreat Packing & Shipping Co., in Lindsay, CA, will market its Sumo Citrus, a Mandarin-orange cross developed in Japan and grown exclusively in California’s San Joaquin Valley. The fruit is seedless, sweet and juicy, says marketing coordinator, Seth Wollenman. “Harvest begins in February and will have it available until we sell out, or likely to the end of March. The real selling point is its flavor. It brixes at 14 to 16.” Suntreat Packing marketed 90 percent of its first crop last year within California, but hopes to venture out of the state and possibly to the East Coast with this year’s harvest. The fruit is naturally soft, similar to the feel of a tree-ripe peach and is therefore packed in a single-layer box to avoid bruising. Sumo Citrus will also be marketed by the company as part of a larger program for 2012 called Suntreat Reserve. Varieties selected for this label meet certain criteria for quality and flavor and also include Oro Blancos, Seedless Lemons, Navels and

30 PRODUCE BUSINESS • JANUARY 2012

“Specialty citrus is displayed either as in-line or in-and-out items. In-line items are Cara Cara Navels and Blood oranges, Pummelos and whatever is the current Tangerine or Tangelo. An in-and-out specialty might be Meyer lemons. Either way, all of the specialties are displayed with the rest of the citrus category and next to high demand items so that consumers can see them and hopefully trade up their purchase.” — Randy Bohaty, B&R Stores

Gold Nuggets. LoBue Citrus’ LoBue adds, “We recom- Jeju Mandarins will be imported for the mend using POS that explains the unique first time this season by Melissa’s/World properties of each variety. For example, the Variety Produce Inc., a Vernon, CA-based Pummelo literally bursts with flavor and Cara specialty produce supplier. Robert Schueller, Caras have lower acid than navels, etc.” director of public relations, shares, “These Mandarins are grown exclusively on the Jeju 2. Use Packaging As POS: There is Island, in South Korea, and are available in increased retailer demand for bags, says December and January. This means they go LoBue. “We now offer specialties in color- head-to-head in the market with domestic coded, 2-, 3- and 4-lb. bags and even 1-count Tangerines, but they have a really spectacular bags of Pummelos.” flavor, plus the attributes consumers want Small versus large bags offer a more such as being seedless and easy-to-peel.” enticing price point to the customer on a premium product like specialty citrus. Plus, the Five Best Ways To packaging provides a way to differentiate Merchandise Specialty Citrus specialty from commodity citrus and a plat- Newer or less familiar varieties of specialty form for education. “For example,” says citrus won’t gain trial or repeat sales without Melissa’s Schueller,“Tangerine varieties all tend the help of creative merchandising. to look alike. Our bagged specialty tangerines 1. Educate Consumers: It’s important to have a header card that shares information educate customers about why a piece of fruit about the variety and usage tips.” is special or different, says Duda’s Bassetti. The Combo Bag, which is constructed of “That is what makes specialty merchandising half poly-plastic and half mesh, is popular for different than for a commodity. POS materials, specialty citrus. Dean Troxell, director of pack- such as price or recipe cards, in-store TV, aging for Sunkist Growers, details, “The poly informative packaging and even social media side allows for branding and product informa- such as a Facebook and Twitter can all help. For tion while the mesh provides open ventilation example, we ran our Merry Meyer Lemon for the fruit. Artwork on packaging is now contest on Facebook and asked customers to incorporating QR codes that can be scanned share with us their favorite Meyer lemon with Smart Phones. This allows us to provide recipes. Not only did we engage the customer additional information on the product and to directly, but their responses provided us with also connect to the consumer with fun activi- important feedback.” ties like videos and games.” Recipes are especially helpful for “oddball” citrus, says Lance Walheim, vice president of 3. Let ‘em Taste: “Wealwayssampleanew variety development for California Citrus citrus variety when we bring it in,” says B&R Specialties Inc., in Springville, CA. “Many Store’s Bohaty. people don’t know that you can pickle the rind “Usage ideas are helpful,”says LoBue Citrus’ of a Buddha’s Hand or that Yuzu is used in LoBue, “but describing the flavors and show- Asian sauces.” casing the items through sampling are the At Rice Epicurean Market, specialty citrus most important tactics.” is prominently displayed and signed, says Kathy Hearl, marketing promotions Luchak.“If there is any POS available from the manager for DNE World Fruit Sales, in Fort shippers we’ll add it to the display.” Pierce, FL, agrees. “Enticing customers to

32 PRODUCE BUSINESS • JANUARY 2012 sample fruit before purchasing will help to citrus is through the use of secondary display boost sales. Studies show that 84 percent of units, says Julie DeWolf, director of retail people say they remember the product they marketing for Sunkist Growers. “These items received during sampling, and 42 percent have need more explanation than just throwing a more favorable impression of the product them on the shelf, and these units are designed after tasting it.” to give the consumers the information they crave. We offer a number of different display 4. Display Front And Center: “Specialty units that fit anywhere from one to three citrus is displayed either as in-line or in-and- cartons of fruit, so they are versatile for both out items at B&R Stores,”says Bohaty.“In-line smaller stores and the large chains.” items are Cara Cara Navels and Blood oranges, Pummelos and whatever is the current 5. Promote: Rice Epicurean Markets runs Tangerine or Tangelo. An in-and-out specialty themed ‘Uncrate the Sun’ ads throughout the might be Meyer lemons. Either way, all of the winter. “We have a specialty box in the ad that specialties are displayed with the rest of the is just for citrus,”describes Luchak. citrus category and next to high demand items “Spotlighting specialty citrus in the chain’s so that consumers can see them and hopefully ad circular has the advantage of drawing trade up their purchase.” customers into the store for this particular “Specialty citrus should be displayed item,” says Melissa’s Schueller. “Simply letting prominently and early in the produce depart- shoppers know you have something new and ment traffic pattern”, says LoBue Citrus’ different can oftentimes be as effective in LoBue. “They are an impulse purchase — displays throughout the produce section of the promoting sales as a price discount.” while Navels, Mandarins and lemons might be same item. As produce departments get larger, “Do price promote as well,”suggests Duda’s on the shopping list, consumers often don’t consumers may not go through the entire Bassetti. “A good price point encourages plan to purchase specialty citrus, so you need section so it is beneficial to have multiple loca- retailers to build bigger displays, add POS, or to position it well.” tions of the same product.” even run interactive events such as contests Hearl recommends, “Create multiple The best way to create space for specialty and demos. This all drives trial.” pb

JANUARY 2012 • PRODUCE BUSINESS 33 Packaged salads and berries are two of the most common uses for clamshells. Clamshell Marketing: Saving Money By Reducing Shrink Be it berries, potatoes or apples, clamshells are proving their worth and showing up all over the produce department. BY BOB JOHNSON

here is a lot to like about clamshell gory. “We expect to see another 15 to 20 How Green Is Your Shell? packaging in the produce depart- percent increase in clamshells because of The reason very few clamshells are recycled ment. They provide the feeling of interest by the consumers and the retailers,” has mainly to do with the sorting process. safety that comes from knowing predicts Kurt Zuhlke, president and CEO of Different types of plastic material have to be Tthat other customers and store Kurt Zuhlke & Associates Inc, headquartered separatedfromeachotherbeforetheyarerecy- personnel have not been fingering the food. in Bangor, PA. cled. But a key step in the recycling process is Clamshells cut down on shrink by protecting The producers are keeping demand for manual separation in which workers use their against bruising of the fruit, and with a snap- clamshells on the rise by responding with new eyes to painstakingly sort items that can be seal by reducing spoilage. They also provide an designs when users have questions or recycled together. The challenge is that the efficient use of space in shipping produce and complaints. “People had bad experiences with different materials used to make clamshells storing it at the warehouse and in the store. clamshells that didn’t conveniently stack on top and other hard plastic containers look very This combination of convenience, safety and of one another for the shelf, clamshells that much the same. reduced spoilage has led to increased use of didn’t fit well in spring-loaded shelves, and According to David Stanton, North Amer- clamshells and their unhinged cousins in the clamshells that were not specifically designed ican head for brand owners and retailers at rigid clear plastic container family. to be tamper-evident,” explains Jim Scattini, NatureWorks LLC, headquartered in “Absolutely, clamshells are being used vice president of sales and marketing at Minnetonka, MN, “The predominant tech- more,”asserts Steve Langdon, vice president Sambrailo Packaging, in Watsonville, CA. nique in recycling is manual separation. You for sales at Precision Packaging Products The ongoing improvements in design are can make clamshells out of many different Inc., headquartered in Holley, NY. creating a continuing increase in the use of materials that look the same, so you cannot “According to our customers, there’s an clamshells for produce. But the one fly in the separate them automatically.” expansion of rigid clamshells, especially in ointment that could prevent increased use of The other issue in recycling clamshells is pre-washed organic produce.” clamshells is the environment: Almost all clear making sure that the labels come off easily The expanded use of clamshells in recent rigid containers are petroleum-based, and even during the recycling process. “All plastics are years is probably just the beginning, as new though almost all of them could be recycled, recyclable, but they are not recycled to any products and new uses figure to grow the cate- many of them are not. extent in North America,” Stanton adds.

34 PRODUCE BUSINESS • JANUARY 2012 doesn’t stick to the PET,”notes Spencer.“The plant-based Ingeo, even if the other plastic “Consumers like to be standards are similar to those for soda pop package materials could be recycled, they are able to see exactly bottles or water bottles.” still all petroleum-based, “except Ingeo, which Another approach to the recycling issue is is made from plant sugars that are fermented what they’re buying to develop methods of separating materials and made into polymers. Ingeo costs more, but with the added comfort that can distinguish among the recyclable the stiffness of Ingeo lets you use less material. materials used to make clamshells and other Target and Wal-mart are both using Ingeo.” of knowing that their plastic containers.“We have to go beyond PET There are also significant constituencies out fruits and/or vegetables and look at all plastics to see how they can all there who see clamshells and other plastic be recycled better,” contends NatureWorks’ packages as another unnecessary strain on the haven’t been handled Stanton.“That means using technology to sort environment.“We don’t market in clamshells,” by multiple people.” them. There’s lots of work going on out there.” asserts Robert White, produce manager at The — Kate Proos, Monte Package Co. Stanton points out that other than his firm’s Living Earth, an independent single-unit

“Bottles, milk containers and detergent containers are about all that is recycled.” This issue is being addressed in Canada by an initiative among Wal-mart, Loblaw and other major retailers to require that their suppliers adhere to standards that would allow them to recycle their clamshells and other hard plastic containers. Ben Miyares, president and founder of Bay Village, OH-based Packaging Management Institute, has been following the Canadian retailers’ push to accept nothing but thermoform PET for clamshells. “Most of the clamshells made from other materials are not recycled because they contain contaminants for the recycling process,”he explains.“Any product supplier that was using PVC or any other material other than PET will have to shift.” The Canadian retailers are working the label adhesive issue, too, by developing standards for adhesives that will facilitate recycling. This move toward uniform materials that will facilitate recycling is starting in Canada, but it could move quickly to the United States if it works north of the border. “Although it is starting in Canada, the U.S. operation of Wal- mart is very interested in this,”says Miyares. The Canadian initiative already has the enthusiastic support of some suppliers here in the United States. “It’s a great program,” says Mark Spencer, business manager for sustainability at PWP Industries, in Vernon, CA. The choice of PET as the standard material for clamshells makes sense insofar as PET is already, by far, the most widely used material. “The majority of the clamshells are PET or No. 1 resin, mostly because of the performance. The clamshell goes through a range of temperatures and the PET stays soft and strong through the process.” The standard for adhesives that facilitate recycling is already in play with plastic bottles, which are already widely recycled. “The key for the labels is that when the adhesive goes through the recycling process it

JANUARY 2012 • PRODUCE BUSINESS 35 Kate Proos, head of customer service at Monte Package Co., based in Riverside, MI. The knowledge that the food has not been handled in the store leads to a greater comfort that it is safe. Langdon from Precision Pack- aging agrees, noting, “Consumers want to know the food has been untouched. There also is a perception produce will last longer in the clamshell than in the bag.”Precision Packaging has a patent pending on a new tamper-evident design. Other suppliers are also coming out with new clamshell designs that are more tamper-proof or tamper-evident. However, Herb Knutson, director of marketing at Shelton, CT-based Inline Plastics Corp., counters, “I don’t believe that there is health food store located in Worcester, MA. The Feeling Of Security any truly tamper-proof packaging. Tamper- “We have an all-organic produce department; While the produce industry works toward a resistance and tamper-evidence are an our customers are very green and they don’t solution to the sustainability of clamshells, the important consideration in choosing pack- want clamshells. Some places will put things in industry already benefits from the widespread aging. These packages can reduce in-store clamshells, but we don’t.” belief that clamshells fit with the strong interest shrinkage and spoilage. Many containers Clamshells have become so ubiquitous in in food safety. The clamshell lets you see the accomplish this through the application of a shipping and displaying produce, however, that produce, and lets you know other customers separate heat shrink band applied around the they show up even in the greenest markets. and store personnel have not put their hands lid during the packing procedure. These are “We get salad mixes in clamshells. The berries on it.“Consumers like to be able to see exactly effective, but subject the produce to unneces- come in clamshells and there’s nothing you can what they’re buying with the added comfort of sary heat and require additional cost and time do about that, but we generally sell our knowing that their fruits and/or vegetables to apply. Our Safe-T-Fresh containers do not produce in bulk,”White acknowledges. haven’t been handled by multiple people,”says require added shrink bands,” he adds. “The

36 PRODUCE BUSINESS • JANUARY 2012 aging protects the fruit and vegetables better “The visibility of the produce is the biggest than flexible packaging, allows for better in- advantage with clamshells. We are using them store merchandising, provides simple reseal-ability, and, with fresh-cut fruits and more than we did in the past. The bagged salads vegetables, creates a ready-to-serve option for are one item. Nothing singles itself out as a consumers.” The key to merchandising is a large window problem with using clamshells.” to let the consumer see the produce. “For — Robert Backer, Giant Food Stores merchandising, most of the time you’re looking at a larger window, and not a lot of tamper-resistant / tamper-evident feature is notes Knutson.“Clamshells and other clear rigid ribs,” says PWP’s Spencer. This window into built into our clamshell containers. Once the packaging provide better protection for produce the produce is the one greatest advantage clear lid is closed, the patent tear-strip hinge must and reduce spoilage, and consumers still prefer rigid packaging has over opaque packaging. be removed by the consumer to gain access to this type of packaging.” According to Robert Backer, vegetable the contents of the package.” For a clamshell to provide this package of merchandiser at Giant Food Stores, in Carlisle, This feeling of safety and security is a major economic advantages, it must save space, close PA,“The visibility of the produce is the biggest reason for consumer acceptance of clamshell well and display the produce.“You want a clear advantage with clamshells. We are using them packaging. “Retailers started using more package at a good price and an efficient use of more than we did in the past. The bagged clamshells years ago,” points out Zuhlke of space both at retail and for shipping,”says Preci- salads are one item. Nothing singles itself out as Zuhlke & Associates. “The main reason is the sion Packaging’s Langdon. This combination of a problem with using clamshells.” security in the package; an individual can buy benefits has many suppliers and retailers drop- Another key to economy is a firm snap, a cleaner item. It appeals to more people.” ping flexible packaging in favor of clamshells which keeps produce fresh longer, and makes it and other rigid clear plastic packages. easier for retailers and consumers alike to Reduce Shrink, Save Money “Wecontinuetoseeashiftofretailproduce handle. “I’m seeing that an increasing Clamshells are a value-added item designed, packaging away from flexible to rigid applica- percentage of clamshells used for produce are ironically, to save money by saving space and tions,” reports Roman Forowycz, corporate manufactured in a way to snap closed,” notes reducing shrink. “The clamshell market has chief marketing officer at Clear Lam Packaging Miyares of the Packaging Management Insti- continued to grow even in the current economy,” Inc., in Elk Grove Village, IL. “The rigid pack- tute.“People started complaining three or four

JANUARY 2012 • PRODUCE BUSINESS 37 years ago that gifts packaged in clamshells were ucts,”reminds Zuhlke of Zuhlke & Associates. toohardtoopen,sonewproductshavebeen And a handful of characteristics sum up a “Youneed developed in response.” good clear rigid container. According to Clear different A clamshell that closes effectively can help Lam’s Forowycz, “There are five main charac- to streamline the retail operation.“Companies teristics that make one clamshell/rigid clamshells for are looking to combine steps, and with container better than the other. They are: different uses. If clamshells, you can build tamper-proofing into Maximizing visibility to enhance product the container rather than band it afterward,” being packaged; providing physical protection I’m using them for NatureWorks’ Stanton says. of the product to prevent bruising; ease-of-use tomatoes, I may These characteristics come together in a good for consumers; helping to improve shelf-life; clamshell product. “Clarity, consistency and and creating brand differentiation through want a little air, ingenuity are the keys to good clamshell prod- easily recognizable design.” but if I’m using it for cut fruit, I am concerned about losing juices.” — David Stanton, NatureWorks LLC

The Right Shell For the Job Clamshells became a standard in the produce department as a way to ship and display berries. Their use expanded to include cut and even whole fruit, tomatoes and greens. “You need different clamshells for different uses,” notes Stanton. “If I’m using them for tomatoes, I may want a little air, but if I’m using it for cut fruit, I’m concerned about losing juices. Is the venting good? Is the seal tight?” The range of clamshell types, sizes and shapes keeps expanding as the uses for clamshells keep expanding. Stanton says, “Clamshells are used so widely there is hardly a category that doesn’t use them.” One area in produce where clamshells are becoming more important is single-serve cut fruit. “You’re seeing more and more cut fruit, and more single-serve ready-to-eat produce,” Langdon of Precision Packaging says. Cut fruit needs a clamshell that is tight enough to prevent the juices from leaking. Giant Food is finding that clear rigid containers can help with other produce display issues. “It definitely works with potatoes,” Backer states.“Sometimes, the clamshells help with the greening problem.” Most of the specifications for a good clamshell depend on what you are displaying. “Clamshells come in all shapes and sizes: vented/non-vented; button lock/hinge lock; 4.4 ounces up to four pounds,” details Monte’s Proos. “For example, we stock around eight varieties of pint clamshells, each one with something different to offer the customer. Clamshells can be used to package produce from apples to zucchini and everything in between.” The first question to ask is whether the shell needs vents to keep the produce fresh, or a tight

38 PRODUCE BUSINESS • JANUARY 2012 seal to keep the juices in. “In the produce common footprint boxes. We developed our line called the ‘MIXIM Standard,’” reports industry we see two distinct types of rectangular Safe-T-Fresh line of tamper-resis- Scattini. “The MIXIM Standard is a 9-down containers,”notes Inline’s Knutson.“Those for tant / tamper-evident clamshells to conform to configuration, which maximizes pallet space, whole fruit and vegetables are usually rectan- the Euro Flat carton, which is one of the thus saving on transportation expense. For gular or square and heavily vented to allow common standards. They allow better shipping example, the industry norm for 1-lb. straw- rapid cooling of the product after it is picked in density to reduce transportation costs from berriesisan8-countina6-downtrayat18 the field. Containers for cut fruit, salads, leaf processor to supermarket, and fit perfectly on tiers high (864 clamshells per pallet). lettuce and other products can be in any a40x48GMApallet.” Conversely, the MIXIM Standard is a 12-count number of shapes and usually are not vented. One firm has developed a strawberry in a 9-down tray at 10 tiers high (1,080). This In fact, for cut fruit, leak-resistant containers clamshell configured to save nearly 6 cents per is an increase of 25 percent. If it costs $250 to are preferred so they don’t make a mess in the clamshell in cross-country shipping costs. ship a pallet across the country, then this repre- supermarket displays.” “Sambrailo also developed a separate MIXIM sents a savings of about $.058 per clamshell.” Strawberries are among the leading produce item in clamshells, and they must be well vented to stay fresh.“We make a lot of the clamshells for berries, and you would also see us doing clamshells in the bakery department or to-go packages in restaurants and delis,”says PWP’s Spencer. “With us, closure and venting are probably most important, along with merchandising. The clamshells need to vent correctly and the label needs to be visible. It’s important to vent them correctly because the berries have to stay fresh.” The design of the clamshell can improve opportunities for venting. “Instead of ridges, the MIXIM clamshells have smooth-wall siding, which reduce mechanical damage because ridges can sometimes cut into the fruit; enhance consumer appeal by showing off the product in the clamshells,” details Sambrailo’s Scattini. “Arched bottoms and hinge-venting are strategically aligned with the vents in the trays, allowing for more efficient air flow, faster cooling and increased shelf-life. They have a reliable and tight friction lock closure. All are made from recycled and recyclable No. 1 PET.” Most clamshell containers are standard sizes for different particular produce items. “There is some standardization,” states Knutson. “Some containers, like those used in the field for products like strawberries or blueberries, have standard square or rectangular sizes such as pints and quarts, and their dimen- sions are basically the same so they fit in the corrugated flats in which the filled containers are transported. For products like cut fruit, there are many standard volumes, like 16 fluid ounces and 24 fluid ounces, but the dimen- sions and shape of the containers differ from one manufacturer to another.” But the key to sizes and shapes is economy of space on the truck, in the warehouse and on the shelf. “There are a number of non- conforming clamshells on the market,” acknowledges Knutson. “It depends on where the container is going to be used. For product packed in the field, most conform to the

JANUARY 2012 • PRODUCE BUSINESS 39 “What’s better depends on the needs of the users. In most cases, clarityisvery important so consumers can see what they are buying.” Clamshells for — Herb Knutson, Inline Plastics Corp. cut fruit need to provide a leak- The clamshell must also stack easily on the free, tamper- resistant retail shelf. The answer to the question of what environment. makes for the best clamshell is ... it depends. “What’s better depends on the needs of the users,”acknowledges Knutson.“In most cases, for juicy products.” etc. It all comes down to personal preference,” clarity is very important so consumers can see The bottom line on clamshell priorities is Monte’s Proos says. what they are buying. But, a container that it depends on what you are selling, and how This is an area worth keeping an eye on, allows blueberries to cool faster than some you are displaying it. “The priorities because suppliers are constantly working to bring other container could be considered ‘better’ if completely depend on what the customer’s out new clamshell options.“Delivering fresh food cooling fruit is important. A tamper-resistant needs are — what they are packing, how they products to the marketplace is dynamic right container could be considered ‘better’ if are packing, how they want to present their now. New products are always coming out,” say shrinkage is a problem. Leak-resistant is better product, what type of master they are using, Langdon of Precision Packaging. pb

40 PRODUCE BUSINESS • JANUARY 2012 Peppers, squash, mangos, beans, tomatoes and cucumbers are just a few of the products grown in Mexico. Mexican Growth and Opportunity New developments in products, logistics, and market positioning allow for expansion of successful relationships and business-building with Mexico. BY JODEAN ROBBINS

exico currently exports multiple growing areas,” agrees Stephen cucumbers,”says Paul Kneeland, vice president around $5 billion in fresh Yubeta, vice president of sales for Farmers Best of produce and floral for Kings Super Markets, fruits and vegetables to the International LLC, in Nogales, AZ. in Parsippany, NJ, with 24 Kings and 6 U.S. market, according to U.S. “Products that cannot be grown cost-effec- Balducci’s stores. “All the stuff we usually get MDepartment of Agriculture tively in North American greenhouses during from Florida just shifts over to Mexico during (USDA) statistics, and the country accounts for the winter months due to limited light and heat the season.” about 15 percent of all U.S. fresh fruit and are available from Mexico at a reasonable price,” Avocados and bananas are other significant vegetable imports. “Mexico provides consis- says Aaron Quon, greenhouse category director export products as well. Sandra Aguilar, tent, fresh supply that is closer to the market for The Oppenheimer Group, in Coquitlam, marketing manager for Ciruli Bros. LLC, in Rio than other options, and in many cases, is avail- British Columbia, Canada. “This enables Rico, AZ, explains, “Throughout the year, able year-round,” says Mayra Velazquez de retailers not only to have a 12-month supply of Mexico is the United States’ leading provider Leon, president of Organics Unlimited Inc., preferred items, but it also makes promotions of tropical items such as mangos, avocados and based in San Diego, CA. possible at virtually any time of year.” papayas. During the off-season, Mexico is also USDA statistics further show that in the “With proper planning and coordination the second leading provider of grapes.” past decade, Mexico’s produce exports to the you can procure almost anything,” acknowl- Through a partnership with Divemex, United States have grown over 150 percent, edges Cano. “You don’t need to speak Spanish Oppenheimer focuses on sweet bell peppers, from just over $2 billion in 2000. The figures to buy from Mexico. You don’t have to buy tomatoes and long English cucumbers grown indicate the crucial role Mexico has grown into volume either. Most of the sales are done on in high-tech greenhouses in Etzatlan and Culi- in supplying consistent product year-round. the U.S. side, which really facilitates things.” acan. “We also market greenhouse slicer “SupplyfromMexicoallowsustoprovide cucumbers, which have a similar appearance produce to customers 365 days of the year Abundance Of Product to the field-grown cucumbers, but because without the thought of where it is from or According to the Nogales, AZ-based Fresh they are greenhouse-grown they are typically what it took to get to our sales floor,” says Produce Association of the Americas (FPAA), superior in quality and shelf-life,”says Quon. Alfonso Cano, produce director for Northgate top produce items entering though Nogales Mexico is also the world’s largest producer, Gonzalez LLC, a 29-store chain headquartered from Mexico include tomatoes, watermelons, consumer and exporter of Hass avocados. in Anaheim, CA. cucumbers, squash, bell peppers, grapes, “Unlike avocados from any other region, Promotable volume and the one-stop shop- mangos, honeydews, chili peppers, eggplant avocados from Mexico are available year- ping aspects of sourcing from Mexico are real and green beans. round,”reports Emiliano Escobedo, marketing benefits. “The consistent supply of readily “We carry numerous items from Mexico director for APEAM, the Mexican avocado available product out of one shipping area including green squash, yellow squash, association in Michoacán, México.“Since Hass makes it very attractive, versus running across avocados, peppers, beans, tomatoes and avocado trees can have two blooms each season

JANUARY 2012 • PRODUCE BUSINESS 41 rod c r ic ad o cc

PDG Produce Inc. imports and distributes a wide variety of produce grown in Mexico. The company’s primary items include tomato, peppers, squash, eggplant, and cucumbers as well as watermelon, honeydew, and grapes. In addition to product from Mexico, PDG also carries product from Holland and Canada. Sales are primarily to the East Coast (east of the Mississippi River) however an expanding sales team is increasingly focusing on sales throughout the country. FROM HUMBLE ROOTS PDG Produce begun in the fall of 1985 in Nogales AZ, as a one man operation by Paul Douglas Guy. Originally from Cleveland, Ohio, Guy worked the produce market there since he was a kid as part of his family’s business. Employment with a produce company out of Rio Rico brought him to Arizona where he has now resided for nearly 30 years. After several years with the Rio Rico company, Guy was encouraged and supported by his personal customers to start his own business.

The last 25 years of business has provided an opportunity for growth moving the company from a one man show to a highly efficient operation now employing over 30 people, working out of 3 warehouses and owning 7 bobtail trucks. Guy began the business in a small rented office space with simply a desk and a phone. Computers were not yet available and all orders, record-keeping and billing were done the old fashioned way ---by hand! Guy still holds some of “the books” to remember what it was like to do business then.

“It has been a slow but consistent growth for PDG,” says Guy. “After 13 years in business I was able to purchase land and build my own warehouse with PDG office space and additional space to rent out. Over time PDG has acquired more business and11 years after building the first warehouse, I was able to purchase and refurbished a second warehouse.” A DEDICATED TEAM PDG’s people are a valued asset and the company has not seen many employees come and go over the years. Guy’s first salesman/inspector was his first cousin, Max Allen who came out west from Ohio as well in 1990 and after 21 years is still with PDG today. More than 90 percent of PDG’s crew has been with the company since its early years. Two of the salesman, Javier Esquivias and Enrique Heredia as well as several on the administrative staff have worked with Guy for 17 years. PDG’s Warehouse Foreman and several warehouse employees have been on board for 14 years.

Yet, PDG is looking for infusion of new talent as well. Among the newer employees, more family members are joining Guy including his nephew, Paul Hunter. Guy’s brother in law Gerardo Bracamonte, and Guy’s sons, Adann Rojas and Andre Rojas, have also been welcomed aboard. PDG’s newest employee is Guy’s sister, Chris Haskins who moved to Arizona from Ohio upon retiring as a police lieutenant after 30 years of dedicated service to the police force. Guy hopes to have his other seven children join the team one day. Guy himself is known for his commitment and dedication to the business and his customers. His wife, Olivia says, “He’s like a doctor on call working round the clock and taking phone calls at all hours! It shows how passionate he is about his work and that he truly loves what he does.” SERVICE ORIENTATION PDG’s success is attributed to its service orientation. Guy’s intent from the beginning of his produce career has been to service his customers in every way possible. He has been known to go above and beyond to ensure his produce transactions provide a positive experience for every client and thus has created long term business relationships.

PDG’s modus operandi is known as not only to be fair but also to respect people and the business itself. “There is a great deal of competition out there and everyone wants a piece of it if not all of it,” says Guy. “I believe there’s enough to go around if you are not greedy, if you’re honest and if you compromise.”

Among PDG’s services is the facilitation of the pickup of product for customers by consolidating all products to a PDG warehouse so delivery can be done at one place at one time. “This service greatly benefits our clients since they are able to save a great deal of time by not having their drivers picking up product all over town,” says Guy. “Other constructive services we provide include our ‘IN and Out’ services for other companies. We’re currently doing this for six other produce companies throughout the year.”

PDG Produce looks forward to continued growth and to remaining dedicated in providing the excellent service they are known for. “Having more people and family on board now opens the door for an abundance of opportunity for our company,” says Guy. “Though we’re not all blood relatives, PDG functions as a family and I feel very fortu- nate to be surrounded by loyal, reliable, hard working people who seem to enjoy working for PDG almost as much asIdo.”

PDG PRODUCE INC.

12 Kipper Street Rio Rico, Az. Tel: 520-281-2605 Fax: 520-281-4306 Email: [email protected] in Mexico versus just one bloom in other countries, growers can pick avocados when the “With proper planning and coordination fruit is at the right maturity level to provide you can procure almost anything. consumers with optimum taste and quality all year long.” You don’t need to speak Spanish to buy from Mexico. You don’t have to buy volume either. New Opportunities Newer items in the tropicals and organics Most of the sales are done on the U.S. side, categories present increasing interest. Compa- which really facilitates things.” nies like Organics Unlimited supply organic — Alfonso Cano, Northgate Gonzalez LLC bananas, organic plantains, organic red bananas and organic coconuts on a year-round we’ll see tree-ripened mangos, Chicozapote, compromising on quality or taste.” basis. “I am handling Mexican guava and it’s lychees, rambutan and other citrus products.” “We believe the Divemex Fair Trade certi- doing well,”says Kneeland.“Specialty products “Mexico continues to focus on growing fied organic and conventional pepper program do well in our stores.” better varieties of tomatoes like round and can create a high level of excitement this “As a company, we have some value-added roma/saladette varieties,”reports Aguilar.“This winter,” reports Oppenheimer’s Quon. products that cater to many Mexicans is to produce better tasting, quality products “Despite the post-recessionary conditions, including Los Elotes de la Esquina (grilled for the consumer.” consumers continue to gravitate toward prod- corn), Ponche Navideño (the traditional warm Mexican producers are also continually ucts that align with their beliefs. The Fair Trade Christmas punch), fresh-cut coconut and looking for new, innovative packaging and Certified label achieves this from a sustainable many more,” says Roger Gay, president of branding ideas. Aguilar says, “We ship a lot of perspective. Divemex Fair Trade certified Cocanmex SA De C.V. in Cuautitlan, Mexico. fresh green beans in various containers, from a organic and conventional peppers are available “We are also marketing a drinkable coconut.” traditional 30-lb. case to smaller, plastic bags that in bulk and three-count bags.” New developments in technology and are preferred by retail customers. This year, we are varietywillcontinuetoaffectMexico’sproduct experimenting with a clamshell pack to market Shifting Logistics availability.“There will be a lot of new products organically grown beans. We invest in new pack- Mexico’s proximity to the United States coming out of Mexico since an irradiation plant aging and research to provide our customers and results in affordable and efficient transporta- has been built,”adds Gay.“In addition to guavas, the end consumer with fresher produce without tion.“The logistics of shipping from Mexico is

44 PRODUCE BUSINESS • JANUARY 2012 beneficial,”states Kings’ Kneeland.“It’s not far “We carry numerous items from Mexico away and in most people’s minds closer can mean fresher.” including green squash, yellow squash, avocados, “From Nogales, we can order into our place peppers, beans, tomatoes, and cucumbers. All the for the next day,”agrees Northgate’s Cano.“We also have strong relationships with shippers stuff we usually get from Florida just shifts over out of San Diego, from whom we can actually to Mexico during the season.” get same-day FOB pick up or deliveries.” — Paul Kneeland, Kings Super Markets Purchasing decisions should take into account the shorter transportation time of Building Relationships We’re working with trusted suppliers.” Mexican products. “Most Mexican tomatoes The best Mexico deal is built on solid rela- “Retailers and buyers should have a consis- aregrownoneortwodays’travelfromthe tionships and good communication.“The first tent, ongoing relationship with their U.S. border,”states Oppenheimer’s Quon.“It is wise step to success is to align yourself with the best suppliers of Mexican produce,” says FPAA’s to take this into account while ordering so the growers and suppliers,” advises Kings’ Knee- Moore. “That relationship allows companies to tomatoes arrive in the preferred condition.” land. “You rely on them to ensure the quality build a program together throughout the season, “Our bananas from Mexico mainly enter standards are there. We inspect at the ware- taking into account times when items should be the United States through San Ysidro/San house, but we expect our standards to be met. promoted, and when new supplies and Diego,”reports Velazquez of Organics Unlim- ited.“MostproducefromMexicoisshipped via truck, and arrives quickly. Bananas from other areas come by boat, and take much longer to get to market.” “Avocados from Mexico get from tree to market in four to five days,” reveals APEAM’S Escobedo. Though historically, Nogales is the busiest port of entry for fresh produce crossings from Mexico, more product is increasingly crossing through other points, especially McAllen, TX. “Consistency in deliveries and availability is a major benefit,” says Lance Jungmeyer, president of the FPAA. “As buyers’ needs evolve, importers will adjust their volumes accordingly, sometimes even on a seasonal basis. The fact that imports are growing through Texas only shows the increased preference among East Coast retailers to source their produce from Mexico.” Ciruli’s Aguilar adds, “The further south a shipment originates in Mexico, the easier it is to ship through either entry point. This is particularly true if the shipment is originating below the Sierra Madre Occidental Mountains, which separate Mexico’s northwest region from the southeast. We ship a lot of mangos from southern Mexico, so the Texas port allows us to get that product to the U.S. faster and with a little cost savings on freight.” “We see a shift toward increased crossing in Texas this season and in the future,” reveals Yubeta with Farmers Best.“The freight advantages of picking up there versus loading in Nogales are making it more advantageous for receivers in the Northeast, Southeast and Midwest. Currently, a new highway is under construction that will make the driving time between one of the main growing areas in the state of Sinaloa and the Texas border almost identical to the time to cross in Nogales.”

JANUARY 2012 • PRODUCE BUSINESS 45 ieNote Side COMMITMENT TO A FAIR AND BETTER FUTURE ocial responsibility, sustainability growers of all sizes across the country.” and Fair Trade are powerful “Growing companies are paying more Smarketing terms these days. “The attention to sustainable farming and majority of consumers care where their social programs for the people working products come from,” reports Hannah in their fields to help them progress,” Freeman, director of produce and floral says Sandra Aguilar, marketing manager business development for Fair Trade USA for Ciruli Bros. LLC, in Rio Rico, AZ. in Oakland, CA. “Many are willing to pay “Among the benefits they offer are 5 to 10 percent more for Fair Trade Certi- housing, meal programs, medical aid and fied products, according to Globescan education. Ciruli Brothers is currently 2010 and Harvard and MIT studies on working with its growers in Mexico to actual purchase behavior in a retail develop a Fair Trade program for mangos. setting.” Other commodities that are Fair Trade Produce companies in Mexico have certified in Mexico include bell peppers been engaged in Fair Trade and/or and avocados.” sustainable farming programs for several Growers are working diligently to find years. “You can now find the various Fair solutions to crucial environmental and Trade Certified products from Mexico,” production issues. “In the state of says Freeman. “These include Divemex Michoacán, there has been detection of bell peppers from Oppenheimer, organic reduced groundwater levels, which is bananas from Organics Unlimited, grapes, essential to stabilizing the fragile peaches, cucumbers, melons and water- ecosystem on which the avocado industry melons from Divine Flavor, and avocados and people of Michoacán depend,” from Del Cabo, Earth Source Trading and explains Emiliano Escobedo, marketing Pacific Organic.” director for APEAM, the Mexican avocado Farmer’s Best has been practicing association in Michoacán, Mexico. “Given sustainable agriculture since the 1970’s. this need, APEAM has initiated a regional “We did this long before it became an reforestation project that will plant 220 industry buzzword,” says Stephen Yubeta, hectares with 220,000 trees that can vice president of sales for Farmers Best naturally grow in these regions.” International LLC, in Nogales, AZ. “Our Allison Moore, communications social responsibility efforts ensure our director for the Fresh Produce Association employees and workers are well taken of the Americas in Nogales, AZ, adds, care of and include such factors as clean “Mexico is leading the way in protected water, recycling, protecting species and agriculture, to better control water use the environment, alternative pest and mitigate environmental fluctuations management, and worker housing and such as temperature changes or rain. All services. We’re proud to say that we were of these steps and more are part of the recently recognized as the most socially way that Mexican farmers improve their responsible in Mexico, competing against stewardship of the land.” pb

commodities are coming into the supply chain.” point of harvest.” “Organics Unlimited producers work Overall, the Mexican industry should be closely with the customers,” says Velazquez. treated as the professionals they’ve become. “Our goal, first and foremost, is to take care of “Understand that the Mexican growing areas their customers in the best way we can. Rela- are very well developed and mature,” states tionships like this are important to Mexican Kneeland. “They should be trusted and producers, and considering it a relationship respected.” versus a quick one-time purchase is important “Continuing to hold growers and marketers for future satisfaction on both sides.” to a high standard, and showcasing product Flexibility in sourcing and promotion is from Mexico presents the best advantage,”says another profitable tool. “Our plan is to not Oppenheimer’s Quon.“Growers in Mexico are make plans until it reaches the U.S. side of the doing a good job with quality by using better border,” reports Cano. “If we buy anything technology and evolving growing methods, from Mexico, we condition our buyers as well like growers anywhere. They want access to the as those selling to us to get us real-time infor- U.S. market, and will do what it takes to mation from the point of sale, not from the successfully sell their products there.” pb

46 PRODUCE BUSINESS • JANUARY 2012

The new mix of pepper varieties has made it possible to turn displays into colorful works of art. Merchandising Peppers: Taste The Rainbow The popularity of peppers continues to grow, as consumers experiment with a variety of colored peppers, and minis, too. BY BOB JOHNSON

ong gone are the days when sweet “In the Northeast and Canada, the elongated “Peppers are one of the most visually appealing peppers meant only the familiar red pepper is popular.” items in the produce department. When green bell pepper that can be sliced This revolution has since made the category merchandised together, the contrasting colors for a salad topping, or split and filled more colorful and complicated, as the create an eye-catching rainbow affect.” Lwith some protein treat. The green optimum combination of peppers shifts and Many suppliers, including Scott Seddon, bell pepper is still the king of the category in varies depending on store location and demo- brand manager for Delray Beach, FL-based many locales, but it has been joined by its red, graphics. But the new mix of varieties also has Pero Family Farms Food Co. LLC, repeats the orange and yellow cousins, and by the versatile made it possible to turn the pepper display into theme that contrasting colors is the key to and newly popular mini peppers. a colorful work of art, and maintaining this merchandising peppers effectively. “You’ve got Dan Sutton, vice president of produce at fresh attractive display is a key to merchan- every color in the rainbow, so make sure you Albertson’s Inc., based in Boise, ID, reveals,“We dising the category. have color breaks in your display,”he says. sell more colored peppers than we ever have. Retailers should be able to count on their Reds have been especially popular since Sun Keep The Rainbow Fresh suppliers for the full range of colors every week World came out with Le Rouge Royale. The The vibrant and colorful pepper varieties of the year. “Peppers are no longer a seasonal greenhouse orange and yellow took off two or make the entire category stand out in the sea of category, and people know this by now,” three years ago,”he adds. green that is the vegetable section. “The display emphasizes Chris Jacobs, president of Clifford Le Rouge Royale brand of peppers started a bringscolortotheproducesection,aswellasto Produce Sales Inc., located in Kingsville, revolution in the pepper category after Sun what you’re cooking,” says Steve Yubeta, vice Ontario, Canada. “Stop using ‘seasonal’ when World International LLC of Bakersfield, CA, president of sales at Rio Rico,AZ-based Farmer’s referring to peppers; if a supplier only has brought it over from Israel two decades ago. Best International LLC. “Green is the most colored peppers available for eight months, This pretty, bright red pepper has a mild, sweet popular color, and red is close behind. Yellow is they should close up shop.” flavor, an elongated shape and minimal seeds. perceived as a specialty item in many places.” Daniel Whittles, director of grower “Red has become more popular than green, The varied bright colors are unique to programs and FOB sales at Rosemont Farms, because it’s a sweeter pepper,”acknowledges Jim peppers, and are the key to an inviting display. headquartered in Boca Raton, FL, recognizes, Cathey, general manager of Del Campo Mike Aiton, director of marketing at Prime “It takes constant filling and rotating to main- Supreme Inc., headquartered in Nogales, AZ. Time International, in Coachella, CA, asserts, tain a great looking display, and it must be

48 PRODUCE BUSINESS • JANUARY 2012 depends on demographics. “Older recipes call we’re not giving up on them.” forgreenpeppers,soit’ssmarttostocksome, One of the reasons mini peppers have come but the ratio of colors really depends on on so strong in some markets is that plant customer demographic,”says Pero’s Seddon. breeders have developed some exceptional new Geography also matters when it comes to varieties, “and as they become more refined, which pepper varieties customers prefer.“There people start thinking about how to market are definitely regional preferences,” recognizes them,”states Rosemont’s Whittles.“We’ve seen Prime Time’s Aiton.“In the Southeast, green is the emergence of seed varieties of mini peppers still predominant, but in the Northeast, red with great flavor and good yields.” rules. Red and green are about the same in the While the mini peppers generally do very Midwest and West. The green peppers are less well in bags, which can be sealed and reopened expensivesotheyareperceivedasavalue,but for later use, according to Robertson, for Sun many people prefer the red because they are World, the larger peppers almost always do best sweeter. The red and green are tied at the top, in bulk displays. and then comes the yellow, and then the One incentive to carry packaged pepper orange,”he details. products is that they are less subject to shrink. There are promotional possibilities to entice “Shrink is a retail priority today and pepper stacked and presented in an artistic manner.” even more new customers to try the red and shelf-life is vital to controlling shrink,” Jacob “Having the different colors out there yellow peppers, which offer a sweeter flavor, but adds. “Packaged peppers have longer shelf-life piques the customers’ interest,” agrees Chris come at a somewhat higher price. “We are than bulk because anything in bulk form is Barnhart, assistant produce manager at Food- working on ideas on merchandising red and exposed to more variable air temperatures and land, in Lebanon, PA, where red peppers have yellow peppers that allow retailers to sell them customer handling.” doubled in volume over the past few years. both by the each or by the pound,”reveals Sun Lee Anne Oxford, director of marketing at World’s Robertson. “It provides retailers an The Informed Consumer Raleigh, NC-based L & M Companies Inc., opportunity to create an image of offering Peppers have become a category that can be stresses, “It is of utmost importance to display value. We’ve been doing this for six or seven effectively promoted virtually any time of the fresh peppers! Properly manage the cold chain months and there has been a significant year. “Well positioned fresh displays of green at 45 to 50°, maintain high humidity, rotate increase in sales. We’re hearing they are experi- bell peppers combined with solid ad pricing product and remove any shrink so that your encing a tremendous turn, and coming back to will provide a lift in sales,”L & M’s Oxford says. display is always fresh and bright.” order more for their stores.” Recipes and cross-promotions with natural A well-merchandised display of the pepper companion items can help increase turn. rainbow is so unique and inviting that one Mini Peppers: A Growing Trend “Merchandise peppers with other salad items producer has come up with a way to bring this Another growing trend is toward the versa- such as cucumbers, tomatoes, lettuce or pack- spot of cheer to a second location within the tile mini peppers in bags that can be resealed aged salads,” suggests Oxford. “Offer simple produce department. Gordon Robertson, for future use. “Our sweet mini pepper recipes like dips, fajita spices and grilling tips.” senior vice president for sales and marketing at program has been growing in demand since we There are many uses for this versatile Sun World International, reveals,“We’ve devel- launched a couple years ago,” reports vegetable and pointing these out can be part of oped a pepper bin that merchandises perfectly Robertson. “The peppers fit nicely with a promotion campaign. “Peppers are a natural as a secondary display location, especially at the consumer behavior because you can use them addition to stir fries and salads, and the green front of the store or entrance to the produce for snacking, a dipping appetizer for a social ones can be stuffed,”says Farmer’s Best Yubeta. section. It’s great for big blowout sales.” event, or cooked in meals. We have done well Although a very large number of consumers with our bagged product in club stores and will have come to know and love peppers, a little The New Rainbow reach out to the supermarkets with a similar information can expand the circle of If there are two things to be said about the item that fits their format.” consumers who know what the buzz is all evolving pepper category they are that the So far, the mini peppers have done far better about. “Signage that informs people about red sweet peppers are leading the colorful in Costco and other club stores than in major peppers can help. Some people think red charge, and that the resealable packs of minis supermarkets.“We sell the mini peppers, but it’s peppers are hot, which is far from the truth,” have led peppers into the healthy snack and not a big deal,”admits Sutton of Albertson’s. Prime Time’s Aiton says. appetizer category. Mini peppers, however, are benefiting from This is a growing category, and retailers But the most important bit of information the growing desire for nutritious snacks. “The should be able to count on their suppliers for to consider about the new category it is that the mini peppers are an increasing commodity,” the promotional materials and information optimal mix of varieties depends on store locale recognizes Pero’s Seddon.“I think snacking fits needed to maximize that growth.“Peppers have and demographics. “Carrying a variety of in with that. The mini peppers are a great, sweet become a growing category over the past 10 peppers is important; the bells alone have six or snacking pepper.” years,” recognizes Jacobs. “If produce directors seven varieties,” Albertson’s Sutton says. “The But like most new trends, the demand for are given an exciting merchandising program number you should carry depends on the mini peppers can vary from location to loca- filled with ideas of selling displays, the alloca- demographics you’re serving.” tion. “We have tried the mini peppers and they tions will expand. Consumers respond to ideas, Theextenttowhichconsumershavemoved have not caught on yet,”says Foodland’s Barn- too. They want to learn about nutrition, types on from the traditional green bell pepper also hart. “They’re something of a niche item, but of use, and multiple ways to prepare them.” pb

JANUARY 2012 • PRODUCE BUSINESS 49 Clear signage is key to a successful organic department. Mature Organic Category Continues To Grow As more traditional supermarkets bring organic produce into the mix, these departments are refining merchandising strategies. BY LISA WHITE

here is still plenty of opportunity in markets are capitalizing on this trend by incor- are eating, certainly not to the point where they the organic segment for traditional porating more organic produce into stores. actively pursue organics across the board,”says supermarkets. Despite the lengthy These retailers are providing added visibility of Tom Tjerandsen, the Sonoma, CA-based North recession and continued conserva- these products by utilizing a number of American managing director at the Chilean Ttive consumer spending, organic marketing and merchandising strategies. Fresh Fruit Association (CFFA). produce is thriving, and in a survey by the In terms of traditional supermarkets, Publix Consequently, as the margins of organic Organic Trade Association (OTA), based in Super Markets is a trendsetter. The 1,000-plus product growers shrink, it becomes less support- Arlington, MA, 97 percent of respondents say store chain has created a destination for able for mass-market suppliers of these products they chose organic produce at least sometimes organic products by establishing a department to pay the additional money needed to farm in 2011, up from 94 percent in 2009. within a department. “Customers expect a organically. “This is becoming a real problem,” The fruits and vegetables category repre- good selection and variety of fresh product Tjerandsen continues. “Why should a grower sented the strongest growth of any organic that is reasonably priced,” says Maria Brous, take land out of production for three years then category, with sales climbing 11.8 percent to director of media and community relations for use other bio-pest control tactics if they can’t get $10.6 billion in 2010, according to the OTA. the Lakeland, FL-based chain. “The markers a price to cover their additional costs?” Organic fruits and vegetables captured over 11 for success in marketing organic produce are The slow-growing rate of the organic cate- percent of total fruit and vegetable consumer an increase in sales, key performance indica- gory also is a factor. If only about 10 percent of sales in 2010, having gained about 9 percent tors and happy customers.” the total produce sold is organic, how long will market share since 1997. it take to comprise 20 percent of the fruit and Organic produce companies point to staple The Evolution Of Organics vegetables that are selling? fruits and vegetables, such as potatoes, onions, More supermarkets are incorporating Evidence of the organic produce category’s leafy vegetables, broccoli and carrots, as major organic produce to differentiate their depart- potential is that it is now common for medium growth categories, saying that consumer ments from those of their competitors. One of and large shippers to integrate organic prod- knowledge of the health and wellness benefits the biggest challenges they are facing is trying to ucts into their lineup. “It has become another of organics was on the rise, reports OTA. Espe- convince shoppers to pay more for these prod- kind of offering,”says Allison Moore, commu- cially strong organic sellers are spinach, arugula ucts. “Continuing research by the USDA and nications director at the Fresh Produce and spring mix. others is not showing that consumers are signif- Association of the Americas (FPAA), based in An increasing number of traditional super- icantly concerned about the quality of fruit they Nogales, AZ.“Although it’s not a big percentage,

50 PRODUCE BUSINESS • JANUARY 2012 the idea of organic is less novel for people.” rampant consumerism that we saw prior to the says Steve Lutz, executive vice president of West The greater influx of organic produce is due recession, with a movement toward more Dundee, IL-based Perishables Group. to the maturing marketplace. In the past, when value-driven purchases having to do more with The increased availability of organic produce organics was still in its infancy, there was lag the connection shoppers feel with their prod- in the past five years has been key in driving the time with people learning to grow these items ucts as opposed to the actual cost of the distribution and allowing the expansion around and converting agricultural space into desig- product,” says Simcha Weinstein, director of stores like Whole Foods. Now, more main- nated organic areas. This resulted in a shortage marketing at Albert’s Organics Inc., located in stream retailers can make the commitment to of product and, in some cases, poor quality. Bridgeport, NJ. carry these products because they know they’re “In many cases, year-round organic produce Still, the challenge for retailers is that they available to put on the shelves. cannot be offered and that has been a problem can only sell what the industry grows.“Retailers Much has to do with pricing and compara- in the industry,” acknowledges Robert can’t get behind marketing until they know it’s bility, especially with organic produce sold in Schueller, director of public relations for a product they can get on a year-round basis,” conventional stores.“A lot of organic products, Melissa’s/World Variety Inc., in Vernon, CA. Now, the learning curve and balance that growers and suppliers were trying to figure out have been largely overcome. By the same token, more retailers now have a better idea of what commodities they should carry and how much space to dedicate to these items. It’s become easier to provide the volume to match the demand.“Retailers understand more about the customer demand for these products, so the industry has stabilized,”Moore says.“There are now more projectable expectations. Those in the industry have more of a grasp on how much organic produce they can realistically move, how much people will pay and what commodities will sell.” Organic food hasn’t always looked appealing or held up very well, however organic seed and production have come a long way over the years. The added media attention about pesticides also has given this segment a boost. “Public awareness and opinions about pesticide residues in our food struck a chord, and co-ops, natural food stores and specialty high-end independent retailers have expanded their organic selection to keep up with demand,” explains Rachel Pagano, organics category director at The Oppenheimer Group, based in Coquitlam, British Columbia, Canada. “The consistency, quality and appearance of organics are now good enough for conventional retailers to sell with confidence.” Volumes have also increased adequately to better support the category.“In the past, larger retailers couldn’t dedicate a section to organic or run ads because there simply wasn’t enough volume available, but now there is abundant supply for those who want to support it,” Pagano says.

Consumer Shifts On the consumer side, even though shoppers are becoming more deliberate and more cautious in how they spend their dollars, they are not automatically reaching for the cheapest, least expensive products. “What we are seeing is a shift away from the

JANUARY 2012 • PRODUCE BUSINESS 51 like apples, strawberries and packaged salads, have come close to doubling [in sales] in the past five years,” Lutz says. “We know that 20 percent price premiums are the magic number and what consumers continue to tell us. If organics are substantially more than a 20 percent price premium, then the likelihood a product will struggle increases.” With the maturing of the market and stabi- lization of supplies, organic produce has gone from being an exotic category to one that most shoppers expect to see in their produce departments. “Early on in its trajectory, organic produce was often overlooked from a marketing perspective. But now, you see organic produce featured and celebrated several times each year, especially around Earth Day and fall harvest time,”says Samantha Cabaluna, director of communication at Earthbound Farm, located in San Juan Bautista, CA.

Effective Marketing And Merchandising Effective marketing and merchandising are necessary to provide added visibility to organic produce, especially when it’s sold in conventional supermarkets. New Leaf Community Market, a six-store chain, headquartered in Santa Cruz, CA, has a color-coded signage program that denotes which produce items are organic, local, conventional or local/conventional so customers can more easily distinguish between the different products. “We merchandise our conventional produce in a separate section from organic items,”says Sarah Owens, marketing director.“With our signage program, shoppers can easily tell if a product is organic, without looking for the word.” There is much dispute about whether it is best to segregate organic items or integrate them with conventional produce. Separating organic and conventional produce can make organic displays more attractive to customers who are not dedicated to these items.

52 PRODUCE BUSINESS • JANUARY 2012 “We merchandise our conventional produce tional stores where the commitment to buy organic is less fixed, there is an opportunity for in a separate section from organic items. With retailers to trade these shoppers up. The focus our signage program, shoppers can easily tell if a needs to be on price, selection, quality and merchandising, in addition to proper location. product is organic, without looking for the word.” Like conventional produce, marketing — Sarah Owens, New Leaf Community Market organics is also dependent on appearance. “Whether people buy it because it’s healthier or “It’s important for retailers to know the sampling on a regular basis, supporting ads because it helps save the planet, success in demographic of their customers,” says Addie with demos to interact and engage with organic marketing has to do with handling and Pobst, who oversees import integrity and customers and cross-promoting with other displays at the retail level,”says Caroline Hogue, sustainability for CF Fresh in Sedro Wooley, complementary items that result in an impulse sales manager at Lakeside Organic Gardens WA. “Stores may want to start with an inte- buy,”Pagano says. LLC, based in Watsonville, CA. grated produce section, then have an area that’s When marketing these products, it’s also Those seeking organic food also may be more of a targeted organic section. The main important to appeal to the aspirations of organic looking for something unique. Displays that are goal is turning over inventory and having it consumers’ desire to buy local and support different and new stand out. CF Fresh’s Pobst look good.” sustainability. In addition, retailers should recog- says. “It’s the interest factor that drives organic The logistics of merchandising organic nize that organics are demographically driven. sales. It’s great if conventional stores can items by conventional products may be “There are locations in most cities that have the combine a half-dozen lesser-known varieties impacted by inventory control and store layout. capacity to succeed with organics; identifying withgourmetorHeirloomproducts.” “Some retailers have a dedicated area to make those niches and then meeting the needs of those Retailers need to focus on communication the organic section a destination,”Moore of the customers with an assortment of 50-60 items with these products, utilizing marketing tools FPAA says. “It also may be logistically easier to can lead to good results,”Pagano explains. such as weekly store ads. “Communicating keep track of products when they’re separated For an in-store organic section to be through ads is important, along with extending like this.” successful enough to stand on its own, an signage throughout the produce department,” Retailers that do well with organic produce investment in strategy and promotion is neces- Melissa’s Schueller says. “Instead of hiding make it a focal point rather than a side note. sary so the category will sustain itself and add to organic in the corner, the breadth of the cate- They keep their displays bountiful and abun- the bottom line. gory should be extended.” dant, and they usually pursue a strategy of “What challenges many companies when it integrating these products versus segregating comes to marketing organic foods is in-store Looking Ahead them. “Most shoppers, with the exception of messaging,”says Weinstein of Albert’s Organics. Some are predicting that in the years ahead, the truly core organic shopper, prefer to have “Most stores could do a better job of telling the conventional and organic horticultural prac- organic integrated with non-organic items so organic story using in-store signage.” tices will become more closely aligned. they can more easily assess the value proposi- Shoppers who purchase organic produce at “Conventional growing is much different today tion,” Cabaluna says.“And they also promote it a conventional supermarket are different than than 10 years ago,” Publix’s Brous says. “As regularly to reward the regular buyers and those consumers who shop at specialty food growerslearnbetterwaystogrowwithfewer attract new ones to the category.” stores who are committed to buying organic. In ingredients, they will do so.” “Chains like Safeway put organic specialty general, consumers who purchase organic Perhaps the biggest challenge that lies ahead items like herbs together and put organic apples products are seeking healthier items for them- will be a demographic shift. Baby Boomers, who adjacent to conventional apples,” CFFA’s selves and the environment. “A shopper going have fueled consumer consumption in the Tjerandsen says. “There is no conclusive into a Whole Foods Market is seeking organic organic and natural foods industry over the research in how to market these items that I’ve products and will go elsewhere if they can’t get years, will not be in a position to lead the way out seen. It even varies within chains.” it,”states Lutz of the Perishables Group.“Tradi- of this recession as they near retirement and Some contend that traditional stores dedi- tional shoppers are more price-sensitive and conserve savings. “Instead, the up-market cated to organics make it a point to provide the attuned to product quality. They are most likely segment of Generation X, people aged 29 to 45, space, necessary resources and effort for to switch from conventional products to and the leading edge of the young Generation Y, marketing and merchandising these products. organics due to convenience or value.” those between 18 and 28, will lead the recovery,” “Organics needs to be seen as a viable category One of the biggest shifts in the segment has Weinstein predicts. “Retailers will have to adapt that can stand on its own,” asserts Oppen- been traditional supermarkets that are substi- their organic marketing plans and approaches to heimer’s Pagano. “The stores that are tuting organic items for conventional produce. appeal to this new generation of consumers.” pacesetters give this section the visibility needed “Some of these organic categories are getting The fact that the organic segment has to sustain itself.” large enough that retailers are making the continued growing in a down economy is a There is no question that a dedicated strategic decision to substitute items that are positive sign that is hard to ignore.“As the green organic section comprised of an expanded organic if consumers will pay the extra cost,” movement gets stronger, we will see more number of items visually stands on its own. Lutz says. These are mainly in stores where the national retailers putting more emphasis on Large, attractive displays that showcase high- demographics support those decisions and, for offering organic produce, the selection will quality fruit will most likely help drive sales in larger chains, it is on a case-by-case basis, become broader and they will do more adver- this segment. depending on the store location. tising in their weekly specials to include organic “We think the formula for success is Even with consumers who shop conven- produce,”Hogue says. pb

JANUARY 2012 • PRODUCE BUSINESS 53 Consumers want to be able to choose from a variety of mushrooms, whether packaged or bulk. Six Ways To Cook Up More Profits This Winter With Mushrooms

Play to every demographic with smart marketing, tasty demos and powerful POS. BY CAROL M. BAREUTHER, RD

uggest customers boost the flavor Aldergrove, British Columbia, Canada.“People consulting firm. of their favorite wintertime soup, cook more in the winter.” According to Joe Caldwell, vice president stew and casserole recipes by Mushrooms are most used as an ingre- of Monterey Mushrooms Inc., headquartered adding fresh mushrooms. Bigger dient, according to the 2011 Fresh Mushrooms in Watsonville, CA,“There is no question that Ssales of this profitable ingredient Attitude & Usage Survey, conducted by Rose what consumers look for in mushrooms is are also a potent way to boost the produce Research, on behalf of the San Jose, CA-based taste. Mushrooms offer a flavor enhancing department’s bottom line. According to the Mushroom Council. Garnish/topping was the sensation called umami, and they have a satis- USDA’s National Agricultural Statistics most popular ingredient application cited, fying meaty texture.” Service’s Mushrooms Crop Report, published followed by salads second and center-of-the- Bart Minor, president and CEO of the August 19, 2011, fresh mushroom sales totalled plate entrées third. Mushroom Council, comments on the versa- $1.02 billion during the 2010-2011 crop What’s more, this same survey showed that tility of mushrooms, “Whether it’s breakfast, season, which represented a 10 percent increase mushrooms are used in myriad ways by lunch, dinner or hors d’oeuvres, mushrooms of the sales value over the prior year. different-age shoppers. For example, dishes in add flavor to everyday meal staples.” “What customers like about mushrooms are which mushrooms take longer to prepare such “In addition,”says Paul Frederic, senior vice their versatility,” says Randy Bohaty, produce as sautéed, with beef or steak or in casseroles, president of sales and marketing for Avondale, director for B&R Stores Inc., a 17-unit chain arefavoredbyoldershoppers,while18to24- PA-based To-Jo Fresh Mushrooms Inc.,“Mush- headquartered in Lincoln, NE. “They can be year-olds used mushrooms as a meat substitute, rooms can‘upscale’ a basic recipe. For example, used in everything from a salad topping to an in ethnic dishes and in sandwiches. mushrooms in meatloaf or as a topping for entrée ingredient.” Flavor and versatility are key mushroom boneless skinless chicken breasts brings those sales drivers. These culinary attributes are two dishes to the next level. Mushrooms are also an 1. Merchandise As An Ingredient reasons why dollar and pound sales of mush- important ingredient across cultures from Mushrooms sell well year-round. However, rooms grew 2.5 percent and 2.2 percent, Asian and Latin to Mediterranean cuisines.” October to May are especially strong months, respectively, during the 52-week period ending Bill Litvin, national account manager for according to Harvey Mitchler, director of sales September 11, 2011, according to Perishables Giorgio Foods Inc., in Temple, PA, acknowl- and marketing for Champs Mushrooms Inc., in Group, a West Dundee, IL-based fresh food edges, “The more often mushrooms appear in

54 PRODUCE BUSINESS • JANUARY 2012 “Recipes are the driving force in mushroom rooms as jump-starters to meal preparation. “Sales of sliced mushrooms, as well as larger sales. Weofferarecipedestinationineachof packages of sliced varieties, are increasing,”says our stores and several call for mushrooms. the Mushroom Council’s Minor.“Retailers can take advantage of this by providing more The recipes change with the seasons to give options that highlight convenience and variety, customers new ideas.” especially in winter months when recipes such — Mark Luchak , Rice Epicurean Market as soups, stews, and stir-fries tend to call for sliced mushrooms.” Whole white mushrooms saw higher sales cooking shows, the more consumers will 4.5 percent from the previous year, and 3.4 than white sliced during the 52 weeks ending become aware and interested in cooking with percent of dollars sold, an increase of 8.4 September 11, 2011, according to the Perish- them. For example, on the Rachael Ray Show in percent, during the 52-weeks ending September ables Group. However, sliced brown late September, a segment aired featuring Big 11, 2011, according to the Perishables Group. mushrooms increased in dollar sales by 5.2 Beefy Mushroom Cheddar Melts. This recipe Jane Rhyno, director of sales and marketing percent compared to an increase of only 0.6 was also included in Ray’s monthly magazine.” for Highline Produce Ltd., in Leamington, percent for whole, while sliced specialty Ontario, Canada, notes,“Exotics are becoming mushrooms grew 18.4 percent in dollars 2. Spice Up Variety more important in the everyday mix as the sold, compared to whole with only 5.3 Mushrooms’ many varieties provide population diversifies and ethnic cuisine percent growth. different flavors and textures, points out Minor. becomes more mainstream.” To-Jo Mushrooms introduced its Tradi- “Recent sales data shows that a wider variety of The flavorful nature of shitake is its chief tional Mushroom Sauté microwavable mushrooms are seeing higher sales, moving selling point, according to Gary Schroeder, pres- mushrooms this fall. The new product past the staple white button mushroom to ident and CEO of Oakshire Mushroom Sales contains seven ounces of pre-cleaned, sliced include brown and more specialty varieties.” LLC, in Kennett Square, PA. “Don’t make the mushrooms with an all-natural sauce that is Nonetheless, white mushrooms remain king mistake of thinking the shitake is only for the ready to eat in four minutes. A line extension of the category. This variety accounted for 74.8 Asian market; most uses aren’t Asian-inspired, is planned. Frederic suggests customers serve percent of pounds and 69 percent of dollars in fact, but are used to add more flavor to a dish. these fully cooked mushrooms over steaks, sold during the 52 weeks ending September 11, For example, most wild mushroom soups use green beans or potatoes. 2011, according to Perishables Group data. shitakes and oysters as the wild mushrooms.” In the value-added arena, pre-stuffed mush- B&R Stores Bohaty agrees, “White mush- Demos are an effective way to entice rooms sell well in the winter for entertaining rooms are still the best-sellers.” customers to buy specialty mushrooms, says and snacking holidays such as Super Bowl. “The ‘meatier’ flavor of brown mushrooms Champ’s Mitchler. “We saw a 220 percent Gregory Sagan, senior vice president of sales makes them popular with customers,” states increase in sales when we demo’d oyster mush- and marketing for Avondale, PA-based Modern Bohaty. “We cycle white and brown varieties rooms sautéed with a little olive oil, salt and Mushrooms Farms Inc., which offers a line of such as portabellas and creminis in our ads on pepper at Costco earlier this year.” stuffed portabella caps in four flavors including a regular basis to encourage trial of the browns.” Blends are another good way to introduce Spinach Artichoke and Crab, says, “As Line pricing of white and brown mush- less familiar mushrooms. Giorgio’s Litvin consumers are eating at home more frequently, roomsonadisalsoagoodwaytoboostsalesof says, “We offer a blend that includes baby we have seen a desire for products that deliver the brown variety, recommends Champ’s bellas, shiitakes and oysters. Tying these a chef-quality experience at a reasonable price Mitchler. “Retailers who promote both for, for newer mushroom varieties to recipes in store point. We have many retailers that have gone example, $3.99 per pound, are seeing brown ads or to recipes appearing on the various beyond merchandising the stuffed product in sales increase and they’re giving them more cooking channels is a good way to encourage their produce departments to displaying in shelf space, too. more experimentation.” their meat and deli departments.” Brown mushrooms accounted for 24 Phillips Mushroom Farms LP, in Kennett percent of total mushroom category sales in Square, PA, offers a new twist with its bite-sized 4. Educate With Recipes pounds, up 2.1 percent from the year prior, and whole white and brown mushrooms in 6-oz. “Recipes are the driving force in mushroom 27.6 percent of dollars, an increase of 2.8 packages under the names ‘Petite White’ and sales,”asserts Rice Epicurean Market’s Luchak. percent from the year before, for the 52 weeks ‘Petite Baby Bella’, reports national sales “We offer a recipe destination in each of our ending September 11, 2011, according to the manager, Kevin Donovan. “We currently offer stores and several call for mushrooms. The Perishables Group. these on a small scale. The advantage is that recipes change with the seasons to offer Specialty mushroom sales are rising at Rice customers can add them whole to any sauce.” customers new ideas.” Epicurean Markets, a 5-store chain based in “Merchandise all mushrooms together,” “The popularity of white mushrooms Houston, TX. Mark Luchak, director of suggests Oakshire’s Schroeder. “Display high stems from consumers’ familiarity, while produce and floral reveals, “We’ve started to margin varieties like portabellas, creminis, brown and specialty mushrooms require carry more variety over the years, and sales of shitakes and oysters at eye level so customers education,” says B&R Store’s Bohaty. “White shitake and oyster mushrooms have increased see them first.” mushrooms are simple to cook so people stick as a result.” with the basics. The exotics don’t sell as well Specialty mushrooms represented 1.2 3. Make Meal-Making Easy because I don’t think customers know what percent of mushroom category pound sales, up Promote fresh-cut and value-added mush- to do with them. That’s why education is so

JANUARY 2012 • PRODUCE BUSINESS 55 important. We like to use supplier-provided materials that feature prepared dishes and POS materials, especially the shelf tags with recipe ‘take-ones’ are helpful ways to provide QR codes that customers can scan with their consumers with ideas.” Smart phones right at the display and get Sagan continues, “We provide many vehi- recipe ideas and other information.” cles to assist our retailers in communicating “Consumers continue to need inspiration at key messages for mushroom usage. For point of purchase,” acknowledges Modern example, we have a color-coding system that Mushroom’s Sagan. “Mushrooms, for most communicates a mushroom variety with a consumers, are probably not on their shopping recipe, a complete shelf-management system, lists unless they are preparing something and most recently, QR codes to provide specific. Therefore, they need to be inspired to another venue to encourage mushroom use. create an impulse purchase in the store. POS Ournewwebsitealsoincludesover80recipes plus information on nutritional and health benefits of mushrooms.” For retailers that want a less uncluttered look, Monterey Mushrooms is introducing new packaging that offers on-pack recipes. Caldwell details,“Fifteen different recipes will be printed on the bottom of our new 8-oz. sustainable corrugated tills and rotated through the year.” Recipes include winter favorites such as Mush- room & Bacon Pasta, Mushroom & Sausage Soup and Mushroom Chicken Piccata. Retailers can teach customers how to enjoy mushrooms through in-store cooking classes or demos, adds the Mushroom Council’s Minor. “The simpler the better. For example, we’ve recently focused on teaching a technique rather than an entire recipe. Caramelize mushrooms in a pan with a little butter or olive oil, sugar and soy sauce. They develop a flavor and crunch that even kids enjoy.” Offer meatless mushroom recipes to cater to vegetarians or flexitarians. Flexitarians are those who eat meatless a couple of times per week. According to the Fresh Mushroom Atti- tude & Usage Survey, 3-in-10 respondents between the ages of 18 and 24 consider themselves vegan or vegetarian, a perfect demographic for mushroom purchases.

5. Cross-Merchandise A Meal Solution Cross-merchandise mushrooms with other ingredients so that shoppers can make a single dish or a complete meal. Monterey’s Caldwell recommends, “Take facings of 8-oz. whole white mushrooms and put a facing in the bagged salad section.” Try sliced mushrooms packs by the eggs to inspire breakfast usage, suggests Highline’s Rhyno, “Also, try putting a display of pasta sauces beside the mushrooms to give the customer an easy meal solution.” One creative way to cross-merchandise mushrooms is by promoting them as a meat enhancer and extender, suggests Minor. “The umami in mushrooms makes them an excellent addition to meat dishes, as cooking the two together provides a major flavor boost, while

56 PRODUCE BUSINESS • JANUARY 2012 “The popularity of white mushrooms new products and cooking ideas,”says Giorgio’s Litvin. “These ideas benefit the retailer by stems from consumers’ familiarity, while brown encouraging at-home chefs to try new and and specialty mushrooms require education... exciting varieties of mushrooms.” Trends in foodservice expected to We like to use supplier-provided POS materials, continue into 2012 include artisan foods, especially the shelf tags with QR codes that convenient and easy-to-make foods and comfort foods. Pizza is a comfort food that is customers can scan with their Smart phones economically friendly. There have also been right at the display and get recipe ideas and many new mushroom-inspired pizzas at fast casual restaurants over the past few years, other information.” points out Sagan. “Mushrooms are a popular — Randy Bohaty, B&R Stores Inc. pizza topping, providing an economical, satis- fying, meaty texture, with the added benefit also increasing the volume of dishes and mushrooms are an ingredient, this display of nutritional value,”he says. helping to reduce sodium and calories.” might be in the produce department or in the The foodservice industry continues to see Consumers are gravitating to the ‘semi- meat department.” growth in the demand for ethnic food, adds homemade’ idea where they take something “Good ideas for a display such as this,” Minor. “Consumer palates are changing and store-bought and dress it up with extras to give recommends Monterey’s Caldwell, “are pasta, more Americans are being exposed to ethnic it a more personal touch. Modern Mushroom’s marinara sauce and chicken or beef with mush- foods at a young age. In fact, ethnic dishes are Sagan asserts,“It is critical for retailers to think rooms; tortillas, cheese, pre-cooked chicken among the most popular at college campuses ‘outside the box’ in this direction. Adding QR strips and sliced white mushrooms; or pre-cut nationwide. As this trend continues, consumers codes to shelf-talkers and shelf-strips in onions, pre-cut peppers and sliced mushrooms may be seeking opportunities to make these different departments encourages mushroom with beef or chicken for a stir-fry.” dishes in their own kitchens. Retailers can help use from non-traditional areas of the store.” by offering simple recipes and cross-promoting “At Rice Epicurean Markets, we combine a 6. Take A Cue From Foodservice mushrooms with marinades and spices native recipe with all the ingredients to make the meal “Foodservice is fortunately always stretching to South American, Mexican, Japanese, Thai, in a special display,” describes Luchak. “When the vision of consumers, introducing them to Indian and Chinese cuisines.” pb

JANUARY 2012 • PRODUCE BUSINESS 57 Jonagold, Braeburn and Fuji are just a few favorite winter apple varieties. Maintain A-Plus Apple Sales After The First Of The Year Controlled-atmosphere apples are a welcome addition to the winter produce department.

BY CAROL M. BAREUTHER, RD

here’s a growing trend that can up. This is about the time grower/shippers are sales and marketing for Fowler Bros. Inc., spice up apple category sales long breaking some of the newer varieties out of headquartered in Wolcott, NY, “By January, after the excitement of the fall storage. These apples give us an opportunity to varieties such as Honeycrisp, Sweet Tango and harvest finishes. Improved add excitement with something new, and Zestar, for example, finish up, and industry- Tcontrolled-atmosphere storage, thereby maintain strong category sales after the wise, about 50 percent of the crop is sold. We coupled with varietal development, is creating first of the year.” still have good availability of plenty of other a chance to sell high quality favorites as well as varieties such as Braeburn, Fuji, McIntosh that‘something new’ into the winter and rest of A New Marketing Niche and Empire. It is the time period from the year. Consider the opportunity gap. Total During November and December the January to September that we look to sell this apple category dollar sales were highest in the marketplace is flooded with many different remaining crop.” fourth quarter of 2010 at $476 million, apple varieties, reports Chuck Sinks, president Two ways the industry is enabling retailers according to Perishables Group, a West of sales and marketing for Sage Fruit Co. LLC, to capitalize on this sales opportunity is by Dundee, IL-based fresh food consulting firm. in Yakima, WA. “There are countless local providing high-quality versions of best-selling However, sales dropped to $458 million in the apples, Michigan apples, New York apples and varieties longer into the season and by offering first quarter of 2011, followed by a decrease to Washington apples.” brand new varieties that store well and are ideal $384.8 million and $337.6 million in the The fall season is especially dominated by for introduction after the first of the year. second and third quarters, respectively. the Honeycrisp variety. Bob Mast, vice presi- Rick Steigerwald, produce director for dent of marketing for Columbia Marketing Favorites Expand Season Lunds and Byerly’s, a 21-store chain owned by International Corp., (CMI), in Wenatchee, WA, Thanks to Technology Edina, MN-based Lund Food Stores, says, “In reveals, “Honeycrisp accounts for up to 30 Retailers look to maintain their apple sales our area, local apples are top-of-mind in the percent of apple category sales in the fall for into the winter quarter and extend the run into fall. Displays are crowded with many different some retailers.” the spring and summer, says Kevin Precht, varieties. When these finish, shelf space opens According to Lee Peters, vice president of marketing program director for the Cameo

58 PRODUCE BUSINESS • JANUARY 2012

works best on early and mid-season apples.” In addition to SmartFresh, there has also been an increased understanding of apple phys- iology and the varying needs of each individual variety. For example, Wolter notes,“Computer technology, such as automated controlled- atmosphere room monitoring has also resulted in more constant room conditions.” Sinks adds: “Computerization has enabled the industry to monitor and control oxygen and carbon dioxide levels along with temperatures much more accurately. This close monitoring prevents fluctuations that causes fruit condition to deteriorate in storage.”

New Late Season Varieties “The ability to offer customers a new variety of apple in the winter brings new life- tothe category,” asserts Jon Clements, director of produce for Kuhn’s Market, an 8-store chain based in Pittsburgh, PA, “For example, we Apple Marketing Association (CAMA), in quality, but also improve, with controlled- brought in the Lady Alice apple from Rainier Wenatchee, WA.“One way to do this is to keep atmosphere storage. According to Jim Allen, Fruit in March. We introduced it through a fresh new apple variety out there longer. This president of the Fishers-based New York Apple sampling and mass displays to pique is a push we started with Cameo last season. It’s Association (NYAA),“Crispins toughen up in customers’ interest. We also had the advantage a variety that does especially well in controlled- cold storage and become better able to handle of an exclusive on this in our area for ad atmosphere storage. We now sell 80 percent of with fewer bruises in packaging.” promotion. This was so successful that we’re the crop after the first of the year.” “Pink Lady mellows in flavor in storage,” going to work with Rainier again to bring in Technological advancements in controlled- says Alan Taylor, the Yakima, WA-based the new Junami variety in February and repeat atmosphere storage have enabled many marketing director for Pink Lady America LLC. the same strategy.” best-selling apple varieties to remain in the “The starches turn to sugars in storage and the “This trend of finding a particular new market longer and in a high-quality state that sugars then balance with the acids to produce a variety’s niche may continue as growers search encourages repeat sales. “For example,” says sweet, less tart and more complex-flavored for optimal times to sell different apple vari- Sinks,“both Jonagold and Gala were originally piece of fruit. That’s why the bulk of shipments eties,” says Sinks. thought to be able to store in controlled- begin in the first quarter of the year.” Rainier’s Wolter agrees. “The advantage to atmosphere only up to March or April. Today, Controlled atmosphere storage techniques holding back a new variety is that as the other harvesting at the correct condition for longer have improved tremendously over the last 15 varieties finish their season, retail space term storage, along with SmartFresh applica- years. Suzanne Wolter, director of marketing becomes available,” she points out. “Addition- tion, means we can store and ship both for the Rainier Fruit Co., headquartered in ally, it provides the retailer with a‘new item’ for varieties with exceptional eating qualities Selah, WA,acknowledges,“This has been duein the apple category, generating additional through August.” part to the introduction of Smart Fresh.” dollars for the department. We have specifically Red Delicious is another variety that Sage Fruit’s Sinks agrees, adding, “Smart- invested in new apple varieties that respond responds well to SmartFresh or MCP (a Fresh technology has revolutionized well to controlled-atmosphere storage because compound marketed by AgroFresh Inc., in controlled-atmosphere storage from the it made business sense. Our strategy to with- Yakima, WA, that slows ethylene production respect that the ripening process is completely hold Lady Alice and the Junami until later in and ripening of fruit in CA storage.) shut down until the fruit is exposed to higher the season, which will make its debut in Roger Pepperl, marketing director for levels of oxygen out of storage. Once out of January with a limited volume of around Stemilt Growers LLC, in Wenatchee, WA, storage, an apple ‘wakes up’ over a longer time 30,000 cases, was very effective, and other laments, “People don’t realize that Red Deli- frame as the effects of SmartFresh diminish. growers have followed in our footsteps.” cious is the best in June and July. That’s because This means a piece of fruit will maintain Late storage, as well as the desire to have we take the best and strongest fruit with the optimum eating quality not only in refriger- something distinctly different, are big factors highest starch content to put into long-term ated storage, but also on the shelf at store level in breeding development today, says CMI’s storage,” he explains. “The negative is that in and on the kitchen counter weeks longer than Mast. “We introduced the Kanzi last season. the heat of the summer, retailers need to make when SmartFresh was not used.” It’s a bi-color apple with Gala and Braeburn sure the apples stay refrigerated and customers Harvista is a new SmartFresh-based tech- lineage that is intensely flavored, almost like should be educated not to leave them out in a nology that works pre-harvest. Pepperl states, a sweet tart. We harvest the Kanzi in fruit bowl in 95° heat to maintain the best “Harvista works in the field to allow better October, and put the majority in storage eating experience.” harvest management, such as aligning picking until January.” Some apple varieties not only maintain schedules with the available workforce. It “Similarly, the Autumn Glory is a new

60 PRODUCE BUSINESS • JANUARY 2012 spicy-flavored apple that stores extremely well,” Mid-winter and spring are strong periods and menu addition items, the apple industry reports Loren Queen, marketing and commu- for apples, agrees Stemilt’s Pepperl. “There is is perfectly positioned with multiple new flavor nications manager for Domex SuperFresh not a lot of produce available in the fruit cate- options to satisfy any palate, says Rainier’s Growers LLC, in Yakima,WA.“It maintains 17 gory except citrus.” Wolter. “This means retailers cannot look to pounds of pressure from October to April. We 1. Health is Wealth: New Year’s weight loss last year’s ad calendar to develop a successful could easily sell it into July because it retains its resolutions to lose weight are a good promo- apple category strategy for this season. They flavor and crunch so well.” tional hook to sell apples, says Fowler Farm’s need to adjust their plans by taking advantage “Eighty-five percent of Piñata, an exclusive Peters. “We encourage retailers to advertise of promoting new varieties.” variety to Stemilt Growers, ships after the first apples as a diet supplement and promote 5- “In the spring,” adds Pepperl, “Promote of the year,”reveals Pepperl. and 8-lb. bags. This year, we’ll push the weight apples in honor of March’s National Nutri- loss verbiage in ad features even more, espe- tion Month.” Make Introductions cially with our key customers.” Last spring, 41 participating supermarket What’s the best way to introduce new vari- As consumers look for more healthy snack chains teamed up in a promotion with the eties? According to Lund’s Steigerwald, get the word out and tell the story.“We did this for the Opal apple last winter,” he says. “It’s a yellow apple that looks different from the rest and is only available for a short time. We made sure all the produce managers had tasted it and knew one or two talking points they could share with consumers about the apple when they sampled it.” The biggest challenge with new varieties is getting consumers to try them, says Rainier’s Wolter.“On the other hand, the most successful introductions include a combined strategy of retail advertisement, prominent display location, creative signage and in-store demos.” Domex’s Queen agrees. “Newer varieties should be well signed with information at point-of-sale on price cards or posters,” he details. “We offer these materials for the Autumn Glory, which have QR codes that take consumers directly to the apple’s website where they can watch a video of the variety being harvested.” There are QR codes prominently positioned on the side of pop-up display bins offered by Stemilt Growers for its Piñata variety, which primarily markets after the first of the year. “In addition to the code,” says Pepperl, “we have a big social media program for the Piñata, including a Facebook page.” High-graphic cartons can help to spotlight anewvarietyaswellasbeusedforbuilding bountiful waterfall displays, suggests Wolter. “One of the hottest trends this year is secondary display bins, which serve the dual function of providing additional display space and eye-catching signage.”

Six Ways To Promote Apples In Winter And Spring David Nelley, apple, pear and pineapple category director for The Oppenheimer Group, headquartered in Coquitlam, British Columbia, Canada, acknowledge the “unlimited opportunities to market apples during the winter months.”

JANUARY 2012 • PRODUCE BUSINESS 61 CAMA is promoting its apple, says Precht. Mother’s Day. “We’re offering retailers a tri-wall bin sleeve “Or, try Pink Lady for Valentine’s Day,”says with a QR code that will take customers to two Pink Lady USA’s Taylor.“We provide our ship- different recipes: a Cameo apple and Brie Crepe pers with a Valentine’s Day poster designed to in the spring and a Chile Rubbed Salmon with make available to retailers. In addition, we’ll Cameo Apple Salsa in the summer.” also have a ‘Leap Day’ promotion based on A projected 400,000 to 500,000 million February 29th being an extra day to enjoy Pink cartons of Ambrosia, another variety that Lady. These two promotions offer a good two stores well, plus an additional volume from week marketing window to promote Pink Lady imports in the summer, has led CMI to create in February.” a unique shipper that will offer customers a Retailers typically like to merchandise large free 12-month kitchen calendar with recipes. fruit around the holidays, says Sage Fruit’s 5. Holiday Promotions: Build themed Sinks. “Knowing this, shippers will store their promotions by pairing spring holidays with large fruit to where it will come out of storage New York Apple Association that saw $25,000 particular varieties of apples. For example, Red and be available to sell at this time. This year, donated to the American Cancer Society. This Delicious for Valentine’s Day, Granny Smith we are seeing all apple varieties peak on smaller promotion is part of an ongoing annual effort for St. Patrick’s Day and Pink Lady for sizes such as 88s and 100s. While the large and to help fight cancer and raise awareness of the cancer-fighting benefits of eating apples. Grocers placed themed posters next to McIn- tosh, Empire and other New York apple varieties in the produce departments of more than 3,000 retail locations. The signs, showing three New York State apple varieties with pink ribbons, alerted consumers to the Cancer Society fundraising effort. 2. Second Back to School: January is fast becoming recognized as the second back-to- school time, says Stemilt’s Pepperl. “We’ll be doing a big push on our Lil Snappers at this time as a great addition for Moms to put in their kid’s lunchboxes.” Lil Snappers are a bagged apple concept where Stemilt sells small-sized varieties such as Gala, Granny Smith, Pink Lady and Piñata apples in 3-lb. stand-up re-sealable bags with handles. These can be merchandized in a themed display carton or in a shipper that can be used as a satellite display. 3. An Apple Variety A Month: Late season apple varieties such as Pink Lady, Sonya, Jazz, Lady Alice and Junami present a great opportunity for retailers to feature a variety or two each month, suggests Rainier’s Wolter. “These apples should be rotated on the front display tables to encourage trial and impulse purchases by consumers. Displays should be built with a combination of point-of-sale options such as posters, display bins, high graphic boxes for waterfall displays and 7 x 11-inch signs.” Wolter adds, “Larger national or regional chains that want to introduce a new variety, but the volume available isn’t enough for a print ad in all stores, may want to consider promoting a different variety in each region. Given the multitude of new varieties available, it should be easily accomplished.” 4. Recipe Features: Seasonal recipes targeting spring and summer are one way

62 PRODUCE BUSINESS • JANUARY 2012 JANUARY 2012 • PRODUCE BUSINESS 63 “The ability to offer customers a new Council and the National Football League that variety of apple in the winter brings new life encourages kids to get 60 minutes of exercise a day. Mac Riggan, vice president of marketing, to the category.” says, “The point-of-sale materials position — Jon Clements, Kuhn’s Market apples as a healthy component of the of the ‘Fuel Up to Play 60’ theme.” extra-large fruit is there, it is not as plentiful as explains Mast. “We suggest building a large Chelan Fresh’s third test marketing period past years.” display of the apples with our high-graphic will take place from January 7 to February 15 6. Sports Themes: Sledding, football and boxes to create a billboard effect, and then in the markets of Jacksonville, FL; Denver, CO; car racing are all sporty themes shippers are include one of the sleds in the display.” and Seattle, WA. using to help retailers to promote their apples. Chelan Fresh Marketing, in Chelan, WA, is Finally, Sage Fruits will again sponsor race For example, CMI will once again offer retail test-marketing a football-themed promotion car driver, Kasey Kahne, and offer several partners the opportunity to run a contest that features bagged apples, display bins, price different point-of-sale materials incorporating where customers can purchase a Kiku apple cards and posters tying in with the“Fuel Up to Kahne, says Sinks.“‘Race Days’ promotions are with their loyalty card and be automatically Play 60”program, a childhood obesity preven- popular in February as the Daytona 500 is at entered to win a limited edition BMW sled, tion initiative sponsored by National Dairy the end of the month.” pb

WHAT DOES A LONGER WASHINGTON APPLE SEASON MEAN FOR IMPORTS? tate-of-the-art controlled-atmosphere storage facilities, the terparts by the time they arrive to the retail shelf. Today’s storage use of ethylene-inhibitor SmartFresh and new fungicide techniques allow us to deliver a crisp, juicy, shiny, flavorful apple Smanagement that allows for better storage are enabling with better shelf-life than the imports, which have traveled about Side Note Washington apple shippers to offer a number of apple varieties a month before reaching U.S. import facilities.” later into the year. “In reality,” says Sinks, “Washington controlled-atmosphere Rick Austin, director of sales and marketing for B.C. Tree Fruits store apples and imported apples are very comparable in appear- Ltd., headquartered in Kelowna, British Columbia, says, “Imports ance and flavor. Flavor may, at times, have a slight difference due are a bit of a challenge now. Before controlled-atmosphere and to the fruit being grown in a different part of the world. This is SmartFresh, there was a large window for imports in the summer. comparable to how a Washington Honeycrisp can taste slightly That’s shrunk now.” different from a Minnesota, New York or Nova Scotia Honeycrisp.” Still, fresh apple imports to the United States in 2010 totaled According to Mac Riggan, vice president of marketing for more than 188.5 metric tons or $168 million, a dollar value Chelan Fresh Marketing, in Chelan, WA, “Many retailers will stay increase of 22 percent over 2009, according to the USDA’s Foreign with domestic fruit as long as the quality is there. If the quality Agricultural Service. Nearly $96 million of the apples originated of the apples changes, then they will switch to imported fruit.” from Chile. “The advantage to staying with domestic apples is the local Tom Tjerandsen, the Sonoma, CA-based spokesman for the and locavore movement,” says Loren Queen, marketing and Chilean Fresh Fruit Association (CFFA), says, “Apples are the No. 2 communications manager for Domex SuperFresh Growers LLC, in fruit shipped out of Chile, second only to grapes. They typically Yakima, WA. start in February and run through November. Gala, Red Delicious, On the other hand, the benefit of merchandising Chilean Granny Smith and Pink Lady are the top varieties. However, Chile apples is an increase in dollar ring, says the CFFA’s Tjerandsen. has an aggressive breeding program for both early and late “Research we commissioned from the Perishables Group shows season varieties.” that shopping baskets that contained Chilean fruit were 1.5 times “In the past and to some extent still today, when offshore larger than those with no fruit from Chile,” he reports. apples arrived, there was a large spread in pricing with imported Another advantage of imports is as a source of best-selling fruit being higher,” reports Chuck Sinks, president of sales and varieties when domestic sources have run dry. Sage Fruit’s Sinks marketing for Sage Fruit Co. LLC, in Yakima, WA. “The demand at says, “Although the Washington industry has the ability to store retail moved from domestic to offshore due to the ‘new crop’ high-quality Galas, we don’t have the supplies given the thought process retailers had for offshore product.” demand to stretch that far into the summer months. But we’re The ‘freshness’ of new crop versus controlled-atmosphere getting close.” stored apples is a matter of debate. David Nelley, apple, pear and The ability to offer new varieties for more months of the year pineapple category director for The Oppenheimer Group, in is another advantage of imports, especially given the time and Coquitlam, British Columbia, Canada, says, “It depends on the effort to successfully launch a new variety at retail. Bob Mast, vice growing season, but controlled-atmosphere stored apples are still president of marketing for Columbia Marketing International Corp., generally old — up to 10 months old compared to two week old (CMI), in Wenatchee, WA, says, “Moving forward we’ll have a two- imported apples from March through August.” season program with Ambrosia, Kiki and Kanzi with imports from However, Suzanne Wolter, director of marketing for the Rainier Chile supplementing in the summer what we grow in Washington.” Fruit Co., in Selah, WA, counters, “Our apples are packed-to-order, “In the end, imports tend to complement, not compete, with which, when compared to imported apples are fresher due to the domestic apples,” says Jim Allen, president of the Fishers-based fact they have been in the box less time than their imported coun- New York Apple Association. pb

64 PRODUCE BUSINESS • JANUARY 2012 Berries and stone fruit are two of the most popular items from Chile. Maximizing Chilean Winter Fruit Sales Combining good merchandising basics with creativity and research can add up to a profitable Chilean winter season.

BY JODEAN ROBBINS

he abundance of high quality, confirms the importance of Chilean fruit to practices like moving supply by creating flavorful produce from Chile store profits. “When we researched data from demand are a successful approach to our enables retailers to stock a wide sales through the front end register we found business. Chilean marketing campaigns are range of preferred items year- some pretty compelling results for focusing on very aggressive and supportive of the business.” round. “It can also create promoting Chilean product,” says Tom T Focus On Fresh And Flavor excitement during the times of year that fresh Tjerandsen, North American managing domestic product is not readily available,”says director for the Chilean Fresh Fruit Association First and foremost, any department looking Karin Gardner, marketing communications (CFFA), based in Sonoma, CA. “Our research to increase sales must assure quality.“Promotion manager for The Oppenheimer Group, in showed the average ring at the front end was is important, but the fruit needs to be of good Coquitlam, British Columbia, Canada. 50 percent higher if the shopper had Chilean quality and freshness to sell,”says Cantwell. “Aggressive retails and frequent promotions fruit in the basket over those who didn’t. Increasingly, quality means flavor and some will move the dial for Chilean products. Additionally, the basket tended to carry savvy retailers are implementing programs to Creative merchandising through the winter traditionally higher margin items. So a retailer return to a focus on flavor.“We’re focusing on months is effective as well.” is not only getting a higher ring, but also selling the eating quality of the fruit,” reports “In our market, we promote Chilean fruit more profitable items,”he explains. Savanello. “Flavor is the best way to increase as much as we can,” says Victor Savanello, By utilizing some easy and available tools, produce sales. It’s great to have the product 365 produce category manager for Allegiance retailers can maximize sales. “If retailers days a year, but if the consumer buys an item Retail Services in Iselin, NJ, a co-op with 81 promote items offered during the peak seasons, that doesn’t eat well, then maybe you’re better stores, mainly under the Foodtown and volume moves, product stays fresh and the off not having it.” D’Agostino banners. “When the stone fruits consumer supports the programs,”asserts Brad Once flavor is assured, sampling is a great come in, we promote almost every other week. Cantwell, vice president of North American step to re-introduce the fruit to customers. The increase in volume with blueberries also sales with Philadelphia, PA-based Dole “There is always potential to create incremental has allowed us to promote those even more.” Deciduous.“Although this business may seem sales through sampling,”says Gardner. “In the A great deal of persuasive evidence complicated for some, simple business past, some consumers have had negative

JANUARY 2012 • PRODUCE BUSINESS 65 experiences with Chilean fruit — maybe they sank their teeth into a beautiful peach only to “Space, allocation and sales go hand in hand discover it didn’t have the juice or sweetness with retail and with the quality of fruit...You can they expected. Through sampling, retailers can help cultivate confidence in winter stone fruit.” legitimize a big space if you’ve got the right fruit. The CFFA offers video products to assist If you must have a fruit that doesn’t eat as store personnel in handling and quality of fruit. “We’ve found our video on care and well as you’d like, then you need to adjust handling and merchandising ideas is getting the space accordingly.” rave reviews around the country, in terms of — Victor Savanello, Allegiance Retail Services helping retailers who have to contend with constant employee turnover,”says Tjerandsen. “It helps not only reduce shrink because of headquartered in Delano, CA.“I spend a lot of a retailer can do is to take advantage of the better handling practices, but also shows time and effort in keeping customers updated consumer marketing programs offered by produce managers how they can use the on crop trends. When items will start, end and suppliers that educate consumers about where proven successful tools provided by CFFA to be at peak volume and value. My hope has their food comes from. These programs help build business and increase sales.” always been to better coordinate product create relationships that consumers come back The video is available on DVD, but can also supply and pricing with retail produce section to the next time they shop.” be downloaded from the CFFA website.“Many pricing, positioning and promotion.” “Colors, trivia and information like retailers are downloading it and using it to “Like any seasonal commodity, buyers need nutrition, history and geography are all things train employees,”says Tjerandsen. to plan ahead,” adds Matt Landi, produce that bring more interest to the product and director for New Leaf Community Markets, a make the produce department more attractive Make Good Plans six-store chain, headquartered in Santa Cruz, and interesting,” says Pandol of Pandol Well-planned displays translate into CA. “Anticipate and communicate your Associates Marketing. increased sales. “Space and location definitely upcoming needs.” Giumarra’s Uchizono adds, “POS and influence sales,” says Craig Uchizono, vice Stores with greater flexibility may find signage can be used to accomplish a variety president, Southern Hemisphere for The greater rewards as supply paradigms shift. “As of goals, including educating consumers Giumarra Companies, based in Los Angeles, the Chileans have developed more and more about nutritional benefits, providing recipes CA.“Fruit in larger displays at the front of the markets, they program less regularly to the and usage ideas and telling a grower story. department with attractive pricing will move United States,” explains John Pandol, director ManyofourgrowersinChilehavebeen more volume. Retailers should allocate space of special projects for Pandol Bros. Inc., based farming for generations and several grow according to which products are being in Delano, CA.“Any significant merchandising flavorful, proprietary varieties that are of promoted that week. Signage should also be assumes certain volumes. We’ve always looked interest to consumers.” used to highlight the fruit. End caps are at supply based on harvest and we’ve had a Effective merchandising means positioning another key location that can be used to paradigm shift there, but now harvest numbers the produce to capture the sale. “Certainly, highlight specific products.” don’t necessarily mean that product will be large displays will catch shoppers’ attention, Displays should be coordinated with other shipped to the U.S. market. This is challenging and solution-oriented displays like cross- factors.“Space, allocation and sales go hand in when you know they’re picking, but are unsure merchandising with other ingredients and hand with retail and with the quality of fruit,” if they’ll ship it here or somewhere else.” recipe information can help drive sales as well,” adds Alliance’s Savanello.“If you have fruit that “The new paradigm in marketing is that the says Oppenheimer’s Gardner. isn’t eating well and you give it an end cap, best promotions will go to those who can plan “POS and signage may help increase consumers won’t buy it and you’ll end up with them on shorter timelines,”continues Pandol. impulse sales,” says Dionysios Christou, vice a lot of shrink.You can legitimize a big space if “The more flexible your promotion, the better president of marketing for Del Monte Fresh you’ve got the right fruit. If you must have a promotion you’re going to have. Stores with a Produce North America Inc., in Coral Gables, fruit that doesn’t eat as well as you’d like, then robust wholesale market nearby like New York FL. “POS and signage can be informative on you need to adjust the space accordingly.” or Philly can really gain an advantage by the quality of the products, introducing new “Retailers can highlight the fruit in store accessing product and working with them to products and seasonal products, etc. Del much the same way as they would during do last-minute promotions.” Monte offers a variety of signage showing summer by creating large, colorful displays,” nutritional value and benefits, and recipe cards says Uchizono. “Point-of-sale materials and Use POS that not only attract consumer’s attention, but promotional calendars should be planned with Information at point-of-sale provides a also educate them on the product.” consideration to which holidays and events are tremendous opportunity to influence The CFFA provides a full range of POS coming up, such as the winter holidays of customers. “These days, more and more tools for retailers to use. “One of our most Valentine’s Day and Easter.” consumers are looking to increase their popular of the POP items right now is our bin Good communication with suppliers is knowledge of the produce they are wrap,”states Tjerandsen.“The retailer rolls this another crucial component for a successful purchasing,” says Steve Monson, Western base wrap around the bottom of the island. It season.“Communication and flexibility are the region produce manager based in Plano, TX, showcases the variety of fruits available from operative words,”says Jim Pandol, president of for C.H. Robinson Worldwide Inc., an Eden Chile and gives wonderful color to the Pandol Associates Marketing Inc., Prairie, MN, company.“One of the best things department. The bright color really attracts

66 PRODUCE BUSINESS • JANUARY 2012 shoppers, especially when you have only a fifth of a second to catch their attention.” “Like any seasonal commodity, buyers need “POS is very effective in our stores,”agrees to plan ahead. Anticipate and communicate Alliance’s Savanello. “We work with the CFFA closely and utilize all of its resources.” your upcoming needs.” “The Chileans have done a great job of — Matt Landi, New Leaf Community Markets providing POS materials and signage,” says Pandol of Pandol Bros. “We’re starting to see the recognition that local means seasonal, and Gardner explains, “While most North we’ll likely pass the 70,000-ton mark on it’s always in season somewhere.” Americans consider cherries a strictly summer blueberries this year,” reports the association’s item, sweet, juicy Chilean cherries in the winter Tjerandsen. “However, retailers had many Be Creative time will be a welcome discovery for shoppers. excuses on why they didn’t want to jump on the Retailers can use creative programs and In season, cherries contribute more sales blueberry bandwagon. Our Barriers to Sales ideas to drive category sales. Through its dollars per square foot than any other item in research looked at many of these objections and Welch’s program, C.H. Robinson is offering a the produce department. No doubt there are came up with some solutions. For example, for Chilean Cycle & Vineyard Tour. “Consumers opportunities for retailers to optimize cherry the barrier,‘blueberries don’t fit into traditional can enter to win an all-expense paid trip for sales in the winter as well.” winter cooking,’we produced a full-color recipe two to Santiago, Chile, including hotel, airfare Research is another valuable sales tool. “It booklet for retailers to distribute to shoppers and guided bicycle tours through countryside can be beneficial to retailers to focus on on how to put more blueberries into traditional vineyards,” says the company’s Monson. “The addressing the preferences and tastes of winter dishes.” sweepstakes is available to retailers on our consumers in their particular market,”advises Welch’s import program and includes Del Monte’s Christou. “By understanding Learn From Others beautifully designed POS QR codes that allow customer demographics, retailers can stock the IRI data purchased by CFFA provides customers to enter the contest and links from Chilean products in demand in their region insight into the sales practices of high retailer websites. In an effort to increase store and showcase the products effectively. Del performing retailers in the Chilean fruit level participation, we’re including a produce Monte uses sophisticated category category. Tjerandsen explains, “The IRI data manager’s contest as well. Produce managers management tools to help retailers ensure we purchased has proven to be very useful to simply send a photo of their Welch’s display to optimal product mix and to make customized our merchandisers and importers. It has us and are entered to win a drawing for a free recommendations that fit each individual allowed us to look at various cities around the mountain bike.” store’s consumer profile.” United States and, based on the population of Higher volumes of cherries from Chile are CFFA has just completed another piece of these cities, determine if they tend to buy more anticipated this year and present a great research pertaining to the blueberry industry. or less of these particular fruits.” promotional opportunity. Oppenheimer’s “This is probably our fastest growing item and “We looked also at differences in the indices between the winter months when we’re in the market and the summer months when the North American shippers are in the market,” continues Tjerandsen. “Then we investigated the reasons for any big differences. In the high indices markets, we knew the retailers were doing something special to achieve those extraordinary results. We wanted to see what they’re uniquely doing to achieve those spectacular results.” In each of the product categories, CFFA now has a list of the things the high performing retailers are doing. “We’ve captured all that information into what we call the High Achiever Best Practices Summary,” says Tjerandsen. “For instance, we now have answers in grapes about how often the high performers advertise, when they advertise, and how much a margin discount they offer the shipper. We know if they combine their ad with red and green, or even red green and black. What cross-merchandising items do they use? Do they utilize POS material? All this learning is on the Chilean fresh fruit website for retailers to download.” pb

68 PRODUCE BUSINESS • JANUARY 2012 JANUARY 2012 • PRODUCE BUSINESS 69 MERCHANDISING REVIEW Tropicals Earning Their Place in the Sun Attention-grabbing displays and educating consumers are two key points to selling more tropicals. BY MELINDA GOODMAN

Mangos and bananas are by far the most popular tropicals, but the category also contains cherimoyas, tamarind, yuca, boniato and plantains.

t seems there is a bit of controversy over icals are finding a mainstream audience at all companies like Turbana and Melissa’s prove which fruit claims the top spot as the types of retailers. that when consumers speak, retailers should world’s most popular — bananas or listen. Coconut water is a great example of the mangos. Some say mangos are Trends In The Tropics power of popular appeal and information Iconsumed worldwide by a factor of 3-to- “America has always been a melting pot,” sharing. Annual web search trends show a 1 over bananas and 10-to-1 over apples, while notes Ronnie Cohen, vice president of sales for nearly 500 percent increase in searches for others note that bananas are the most exported Vision Import Group LLC, in River Edge, NJ. coconut water. fruit by volume. “What has traditionally been a food culture But clearly, coconuts or plantains alone What is clear is that along with bananas, influenced by European immigrants has shifted cannot sustain the category or be the singular mangos and a growing number of other to include a wide range of ethnicities, such as fuel for growth. Mary Ostlund, marketing fruits known as tropicals and exotics are Latin, Asian and Indian immigrants that bring director for Brooks Tropicals LLC, in Home- starting to find popularity with domestic new foods that include an array of tropicals.” stead, FL, points out that mangos and papayas consumers and corresponding space at But the presence of tropicals in mainstream are the fastest growing items in the produce retailers throughout the United States. In retailers is not only influenced by the people department, and quickly on their way to main- fact, Jeff Haines, produce supervisor for Fry’s and places from which these tasty fruits origi- stream recognition. Ostlund believes the Marketplace #612, in Phoenix, AZ, says, nate, but also by the shifting trends of pop popularity of these items opens the door for “Tropicals are a must-have, wow factor for culture. From the popularity of on-the-go consumers to try other tropicals due to my department and shoppers come here snacks, and the appeal of health and nutrition, increased interest in nutritious eating. looking for unique items.” tropicals are winning not only hearts and “Consumers want to make more healthful Traditionally, tropicals have been consid- minds, but also shares of stomach. One needs choices, and they know fresh produce is part of ered a specialty item often carried only in to look no further than Turbana’s snack that choice,”Ostlund notes.“As omnivores turn ethnic markets or in small quantities around friendly potato chip replacement — plantain into vegivores — those who want more fruits peak seasons or ethnic holidays. However, chips — or the coconut punch tool available and vegetables on their plates — they’re today’s changing demographics, continued from Melissa’s/WorldVariety Produce Inc. that tempted to try new foods and expand their fruit cultural exposure to travel and ethnic cuisine, provides easy access to the low calorie, elec- and vegetable palate, and tropicals really deliver.” as well as an ever-increasing proliferation of trolyte friendly juice of the sweet young So if consumers are talking about tropicals, cooking shows with online food content, trop- coconut. These value-added products from how do we make sure they are buying?

70 PRODUCE BUSINESS • JANUARY 2012

MERCHANDISING REVIEW

PHOTO COURTESY OF FRIEDA’S INC.

Vertrees, marketing director for M & M Farm “For many consumers, they don’t come to the Inc., of Miami, FL, points out that tropical store expecting to buy tropicals, so they will not roots play an important role in the category. Although important to the category mix, roots look for the tropical display. If tropicals are should be added to the assortment based on merchandised next to items they commonly buy, geo-profiling of store locations, as their popularity is culturally relevant and they do not it inspires purchase.” have broad demographic appeal like some — Sam Chevalier, Big Y Foods Inc. tropical fruits, he adds.

The Tropic Zone works for you and execute it fully with an Merchandising Philosophies It’s first important to note and understand aggressive product mix, prominent location There are two trains of thought on the classification distinctions of the tropical and promotional plan. merchandising the tropical category — placing category. First, tropicals are considered to be all tropicals in one location, or mixing things items from a tropical growing region, and typi- Product Mix up. Regardless of location or merchandising cally not grown in the United States. However, As mentioned earlier, the product mix of strategy, both methods can be effective, but the it is important to note that small regions of the tropical category is pretty diverse, but the standard rules of merchandising apply. Florida and California do produce a few trop- category leaders include bananas, pineapples, Displays must be fresh and well stocked so icals. Second, the tropical category often mangos and papayas. Additional specialty consumers have a desire to shop them. includes items considered to be exotics — items like coconuts, plantains and guava If you decide to take the path of creating a specialty items with which consumers are continue to gain market share. stand-alone tropical category, the goal is to unfamiliar. Thirdly, tropicals are not limited to Karen Caplan, president of Freida’s Inc. build large displays filled with a variety of trop- fruit, and often include tropical roots like yuca, based in Los Alamitos, CA, says that although icals. Robert Schueller, director of public boniato and malanga. Despite these distinc- Cavendish bananas are often merchandised in relations for Melissa’s, suggests grouping all tions, the lines of the tropical category can be their own category, many specialty banana tropicals together. “Many tropicals are used a little blurry. varieties like Manzano and red bananas are together so they should be merchandised Blurry or not, retailers must be able to growing in popularity. together. Their beautiful colors and exotic define the tropicals boundaries to develop Marion Tabard, marketing director for looks provide for some natural color breaks.” category management strategies. For some, the Coral Gables, FL-based Turbana Corp., Fry’s Haines agrees that one large tropical tropical category may include bananas and agrees, noting the budding interest in baby section can be highly impactful. “A well pineapples; for others, bananas might be their bananas and plantains including burros and thought out tropicals table showcasing unique own category. And even some specialty citrus Hawaiian plantains. items and offset with different fixtures, heights like Buddha’s hand or kumquats — although a Melissa’s WorldVariety Inc., headquartered and layers can really draw people in — and specialty citrus — might be included in the in Vernon, CA, searches the globe to bring a getting them to the display is key, since 90 tropical category. variety of products to the marketplace, percent of purchase is impulse,”he remarks. And that’s just assortment. Merchandising expanding the category with items including Summer themes, tropical island themes poses an additional set of challenges and South African baby pineapple, passionfruit, or Tastes of the Tropics bring bold colors, varying opinions on where and how to show- starfruit, cherimoya, mangosteen, dragonfruit, warm feelings and in-store excitement that case these tropical treasures. What is important rambutan and more. draw consumers to the display. This is the is that as a retailer, you select a strategy that But tropicals don’t stop with fruit. Mark perfect time to demo products and give

72 PRODUCE BUSINESS • JANUARY 2012 tied to an in-store ad.” Holidays are also important promotional periods for most tropicals. Christmas, New Years, Easter, and Rosh Hashanah all are excellent times to promote tropicals. Used to create new dishes or even attractive center- pieces, tropicals provide vibrant points of interest sure.

Start Spreading The Word The in-store experience is a great opportunity to remind consumers to add tropicals to their baskets, but as mentioned earlier, winning hearts and minds is critical. The example of the growing popularity of coconut water clearly makes the case for good PR. Accessing and sharing information both online and offline has become an important part of the information-gathering process for today’s consumer. The proliferation of online content via QR codes, YouTube, blogs, Face- consumers their first taste of tropicals and for built in product information about taste, book and Twitter provides a constant stream encourage purchase. preparation and use — key factors in of data. Sam Chevalier, produce manager for the consumer’s selection of a product. In its most traditional form, books and West Hartford, CT, store of Big Y Foods Inc., cookbooks continue to be a key source of based in Springfield, MA, prefers the mix-it- Promotion Is Key information. Melissa’s understands that and up mentality of merchandising by stocking It seems that a popular sentiment among willbeofferingits3rdbookinDecemberof tropicals throughout the entire produce retailers and suppliers is that education is key. 2012, delivering additional information for department. “For many consumers, they don’t Freida’s Caplan remarks, “If consumers don’t fresh produce enthusiasts. come to the store expecting to buy tropicals, so know what to do with it, they won’t buy it — Melissa’s and other suppliers are also they will not look for the tropical display. If POS is crucial.” communicating through the web to dissemi- tropicals are merchandised next to items they Schueller agrees, “Melissa’s has a very nate information. Both Frieda’s and HLB commonly buy, it inspires purchase.” specific strategy for POS — highlighting flavor, Specialties of Pompano Beach, FL, have recog- Charlie Eagle, vice president of business season, usage and nutrition attributes that nized the health and nutrition value of papayas development for Pompano Beach, FL-based appeal to consumers’ basic needs in the and the importance of their digestive enzyme Southern Specialties Inc., also likes the idea of product selection process.” papain. Frieda’s has created an educational merchandising tropicals throughout the A great case for the importance of in-store video on YouTube to discuss Papaya 101, while department and cross-merchandising tropicals promotion can be gleaned from looking at the HLB appealed to consumer’s quick fix cure with synergistic items like limes. “Limes are rising popularity of mangos, thanks in part to desires with a campaign telling consumers part of many tropical dishes and provide versa- the efforts of the National Mango Board, about papaya’s health benefits and ability to tility and consumer awareness to help spur which in a few short years, has helped grow cure hangovers. impulse purchases of additional tropical sales and awareness through its use of in-store Ostlund of Brooks Tropical says, items,”he comments. signage and demos that have promoted how to “Consumers want to share — changing one’s Regardless of merchandising preferences, cut a mango, ways to use a mango and the diet is a lot more fun when shared with family everyone agrees that tropicals cannot be in the differences in varieties. and friends via Twitter, Facebook or a blog. back of the department item if you want to At Big Y, Chevalier believes POS is impor- QR codes are allowing us to provide imme- promote sales. Moving tropicals toward the tant, but the most important promotional diate access to how-to information at point of frontofdepartmentorfeaturingkeyitemson tools are his employees. Each produce depart- purchase. We also have information for end caps can promote sales. Chevalier remarks, ment employee has front and back of the store recipes and story ideas on our website so food “Both mangos and red papayas are must-have training and tries all of the fruits and vegetables bloggers can share more information with items year-round, and mangos have reached a so he or she knows what they taste like. This their readers.” level of popularity and sales significant enough hands-on education allows employees to It’s clear tropicals have come a long way, not for me to dedicate a front table.” engage with consumers and suggest new items just in miles from their exotic locations, but in Tropicals are mainly sold bulk, but some and create shared enthusiasm. the minds of today’s consumer. Continue to suppliers are starting to provide packaged Melissa’s actively promotes peak-of-the- create opportunities to grow the category by products, which help increase shelf-life, main- season products with in-store advertising. crafting compelling displays, promoting health tain quality and provide higher rings because it Schueller comments, “When a product is in- and nutrition information and sharing forces consumers to purchase more product. season, its flavor is at its prime and the cost is cooking tips and recipe ideas that will inspire Packaged product also creates opportunities more attractive for consumers, especially when consumers all year long. pb

JANUARY 2012 • PRODUCE BUSINESS 73 ATTENTION ALL BUYERS use

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74 PRODUCE BUSINESS • JANUARY 2012 DRIED FRUIT & NUTS Peanuts: An American Tradition Supply challenges will keep processors and retailers on their toes to ensure the crop stretches through the year and still provides consumers with value. BY MEREDITH AUERBACH

In-shell peanuts play an integral role in American sports tradition, whether it’s

PHOTO COURTESY OF HAMPTON FARMSS at an MLB or Little League game, or munching on them during the Super Bowl. Caption hese days, in-shell peanuts have a number of positive attributes, but unfortunately, news about the 2011 harvest isn’t one of them.“Weather Thit us hard,”reports Terry Williams, national sales manager at Sachs Peanuts, in Clarkton, NC, “both during the growing PHOTOS COURTESY OF SLATTERY’S PEANUT COMPANY season and post-harvest when peanuts are dug up and turned out on the ground to air out. be tested this year like nothing in recent packaged products years ago, driven by food The varieties used for in-shell and snack nuts memory. We will all learn a lot about their safety and food allergy concerns. It is increas- — different from those used for peanut butter habits and preferences. As a company, we’re ingly a UPC environment. “This year, some — were up to 70 percent short in west Texas going to do everything we can to make sure the retailers are switching from a 24-oz. bag to a due to drought and about 20 percent short in industry is not negatively impacted by this 20-oz. bag to maintain a price point,” says North and South Carolina. We also have little single season.” Williams. “Others are considering downsizing carry-over from the previous year.” What is important to remember in chal- from a jumbo nut with nine to 11 in-shell Pete Jessup, director of retail sales for lenging times is the rest of the in-shell peanut peanuts per ounce to a fancy with 11 to 13 Severn, NC-based Hampton Farms, admits, profile. Peanuts remain the lowest cost nut; peanuts per ounce. We expect fewer jumbos “There were fewer acres in production. they have a strong nutrition story and carry the this year, so some may be forced to make the Farmers every year must decide which crops to FDA heart-healthy claim, which not all nuts change anyway. With in-shell peanuts as such plant, and cotton and corn had higher prices. do; in-shell peanuts are integral to American an impulse item, retailers will be carefully Peanuts are a rotational crop, so acres were sports and family traditions, whether it is going matching customer perceptions of quality either shifted or not put into peanuts. We want to a MLB or Little League game or watching against pricing needs.” peanuts sold fresh as possible and, because of the Super Bowl with family and friends in the Standing up for his sports-mad and peanut that, our goal is not to stockpile.” living room. loving customers, Andy Klein, president and Retailers and consumers will see higher Retailers around the country are using owner of seven Klein’s ShopRite stores in prices for in-shell peanuts, along with many strategies suited to their own local markets to Maryland and New Jersey, says,“I like ‘em big. other food items, in the produce department help get over the hump. Processors have addi- The shell size attracts the buyer, and most of in the coming months. Supply and demand tional tips. our customers would rather pay a bit more for still rules. the biggest nuts. We do offer different package Jessup summarizes one view of the Look At Sizes, Nuts and Packages sizes to meet different needs, but the 24-oz. industry,“Consumer purchase and pricing will Bulk displays at retail largely gave way to package is our biggest seller.”

JANUARY 2012 • PRODUCE BUSINESS 75 DRIED FRUITS AND NUTS

“In-shell peanuts generate good profit levels tion, especially in softening the perception of price. What works best for us is at least three for us. We go for high visibility, using wood facings on each item, four shelves high, even if merchandisers, putting peanuts with other nuts that means packages are merchandised on lower shelves in the produce department. and trail mix, keeping the category together. Secondary displays in the beer aisle, or the Sometimes, in smaller stores, they are on snack aisle or as part of a nearby end cap, can really help build sales.” lower shelves.” “In-shell peanuts generate good profit — Andy Klein, Klein’s ShopRite levels for us,”comments ShopRite’s Klein.“Our stores, and the rest of the 280 ShopRite stores, introduced its new Hickory Smoked Peanuts, all tend to be high-volume stores that range saying,“These are available in 10-oz. packages from about 35,000 to 80,000 square feet. We go with a suggested retail price of $1.99. Hickory for high visibility, using wood merchandisers, Smoked Peanuts can be found in the fresh putting peanuts with other nuts and trail mix, produce departments of leading regional and keeping the category together. Sometimes, in national supermarket chains, including Food smaller stores, they are on lower shelves.” Lion, Giant, Kroger, Publix, Ralphs, Stop and Hampton Farms’ Jessup says, “In the past, Shop and Wegmans.” there haven’t been these wide swings, and movement was pretty stable and predictable. Promotion More Important Than Ever This year, display and promotion will be what Sachs’ Williams looks back at practices of generate more incremental sales. We’re testing years past. He muses, “A good everyday retail some display devices, including shippers. price on a 10-oz. package of in-shell peanuts There’s new packaging in the works that we was frequently 99-cents; now it could be will bring to market this year. This industry has PHOTO COURTESY OF SACHS PEANUTS anywhere from $1.39 to $1.59 — a substantial notbeenafastmoverduetoaslowerspeedto Dave Erickson, buyer and merchandiser for increase. A promotional level could be $1.19.” market in a number of channels other than Rosauers Supermarkets, a 22-store chain based Stores that are part of two major North- supermarkets. All our efforts are to extend in Spokane, WA, reports, “We stock three to west chains were promoting 24-oz. bags for shelf-life and freshness.” four sizes, from 12-oz. to 16- and 48-oz.” $2.09, regularly priced at $2.99. A larger 3-lb. In the face of a challenging season, A good assortment of standard-sized pack- package was promoted at $3.49 with a regular Erickson of Rosauers pitches for more promo- ages selected from bags, including 8-, 10-, 12-, price of $4.99. tion support from the supply side. “In-shell 16-, 20- and 24-oz. packages, along with larger Processors and retailers make the most of peanuts have been a successful category for us, sized 3- and 5-lb. bags means it is possible to the natural tie-in between in-shell peanuts and but over the past couple of years it has been put together a selection to match what local sports. Dennis Slattery, owner and president dwindling. We think there’s not enough consumers want and are willing to pay for. of Slattery’s Peanut Co., in Spring Hill, FL, promotion or backing from local brokers.” Three to four choices will cover most retailers’ points to January through March as the needs and space allocations. strongest sales quarter, thanks to the Super Health Nuts Bowl, Final Four and Spring Training. Traditional tie-ins with sports may have Flavor Innovation Hampton Farms extends the best times for distracted consumers from full realization of Beyond basic flavor variations of raw and promotion into summer. the nutrition profile of peanuts. Sherry roasted, salted or not, in-shell peanuts are During baseball season, specially printed Coleman Collins, RD and marketing commu- taking on new flavor trends which are, gener- bags help draw consumer attention. Display nications manager for the Atlanta GA-based ally speaking, hot and spicy. Expanding size and location then become key measures of National Peanut Board, confirms that peanuts displays with choices of Hot and Spicy Peanuts success. According to Williams, everyone in the have more protein than other nuts — at 7 with Tobasco, Hickory Smoked Peanuts and industry needs to work with retailers to stretch grams per one ounce serving — more folate, Cajun Creole Hot Nuts sets the category up to the crop throughout the year and still provide more antioxidants than broccoli, carrots or establish more snack opportunities and good value to the consumer. That could be green tea. Like all plant-based foods, they are promotions and to draw in partners such as achieved through strategic messages, displays, naturally cholesterol-free. beer and soft drinks. promotions, sizing and pricing. He says, “We The FDA imprimatur of peanuts as a heart- Sachs’ Williams contends, “Along with our think consumers understand the basic situa- healthy food is an especially strong advantage Hot and Spicy Peanuts with Tobasco, we’ve tion with supply and will support moderate and a message that resonates with consumers. also introduced a stay fresh seal on our 24-oz. increases in price.” The best way to drive that home? Consider and 3- and 5-lb. bags. It’s been very successful Slattery, whose company distributes from demos that let shoppers associate great nutri- generating 10 to 15 percent additional incre- Florida to Maine, contends, “From what I’ve tion with fun eating and snacking. mental sales.” seen, if retail pricing doesn’t go much above Another promotable feature of in-shell The flavored nuts tend to carry a higher $3.29 for a 2-lb. bag of jumbo peanuts, peanuts is that they simply take a long time to price point. Tom Nolan, vice president of sales customers don’t mind the cost.”He continues, crack and eat, slowing consumption and and marketing for Hampton Farms, in May “Size of display is at least as important as loca- allowing sensations of satiety to kick in. pb

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RETAIL PERSPECTIVE

DISPARITIES

ne of the hottest topics in 2011 has the balance of the department would probably show a significant been the growing disparity among differentiation. For a department with only 500 SKUs, while some Ovarious population groups. The top claim upwards of 1,000, that provides 50 to 100 items for comparison 20 percent share of pre-tax income has not only for shrink, but also percent of sale and profit contribution. grown from 45.5 percent in 1979 to 55.9 The next step is having a selection of good value-priced items often percent in 2007. This high-income quintile in the form of smaller sized alternatives. Rarely is this apparent consis- average income of $264,700 compares with tently in mainstream supermarkets. Recently, I found a display of tote the bottom quintile average of $18,400, and bag smaller sized Gala apples grown in New York State in a South- $42,500 for the second. Approximately a eastern Super Wal-Mart. The opportunities are there, but require third, 100 million, has income from all sources less than 150 percent greater buyer effort coordinated with producers to develop marketing of their respective area’s poverty level. programs conducive to lower income purchasers. A recent study of trends from 1970 to 2007 of over a hundred Consumer eating habits are the most recent disparity, as snacking metropolitan areas translates the above disparity into a middle class is becoming the new dynamic for up to a fifth of the population eating that has shrunk from 65 to 44 percent of the population, with the so- one or fewer traditional daily meals. Will the industry readdress the called “poor” now accounting for nearly a third of the population, latest USDA illustration of food group consumption? while the affluent class doubled to 14 percent. Is it any wonder chains As major chains increased procurement directly from shipping like Whole Foods, The Fresh point since World War II, Market and other upper-middle reducing the volume going to class retailers continue meeting brokers and terminal markets, with success while mainline The growing disparity between higher this disparity is now taking a new operators struggle? produce margins and declining income twist. Similarly, there is becoming a levels of the lower half of the population Not only has Delhaize growing disparity in the ratio America centralized a majority of among types of food retail comes at a time after the long ago historic operations to various individual formats. Combining the volumes justification for high produce margins... locations, the latest development of the German Albrecht family is a Preferred List of Brokers Trader Joes and somewhat endeavoring to make the cate- smaller Aldi, the total would gory management process more place them among the Top 15 retailers in the United States. These efficient. The Association of Sales and Marketing Companies (ASMC) limited assortment stores — especially Aldi’s, which believes its abbre- oppose the program, stating, “Delhaize is attempting to assert viated, predominantly private label assortment fulfills most of its economic power with faulty legal demands, to force manufacturers to consumers’ needs — present both an opportunity and a challenge to use their designated broker when the right to select agency, which the produce industry. The sharp operator who can show the chain how represents a seller, has always been the sellers.” to successfully handle an expanded offering of basic produce will also This disparity has both good and bad implications. On the benefit its customers. surface, the efficiencies are plausible. The larger question becomes During the period of growing income inequality, retail produce what happens when a local broker to one of their chains is no longer departments not only expanded SKUs, but also created beautiful in the picture. There is a fine line between efficiencies of central- displays of large size fruit selling at relatively high prices, coincidental ized programming and local implementation. Granted, today’s with produce margins continued increase, offsetting center-store technological advances provide the potential to overcome some of product margins reductions. the challenges. The growing disparity between higher produce margins and More bothersome is the choice criteria. The business has always declining income levels of the lower half of the population comes at a been as much about people as it is about product and process. Rela- time after the long ago historic justification for high produce margins tionships individual brokerages have with employees of the chains that were based on less effective post-harvest handling, slower trans- raises a question when relatives are employed by both entities. Is the portation and limited sales analysis ability resulting in substantial success of each interdependent or is there a level playing field? shrinkage reducing profits. All of these disparities are integral to coping with current economic Rather than looking at overall produce department shrink today, an situations. All are worth more detailed analysis if produce is going to analysis comparing shrink of the Top 10 and 20 percent of SKUs with play a larger role for healthy eating. pb

By Dave Diver Dave Diver is the former vice president of produce at Hannaford, and a regular columnist for PRODUCE BUSINESS.

78 PRODUCE BUSINESS • JANUARY 2012

EUROPEAN MARKET A FOCUS ON FLAVOR AND AN ALIGNED SUPPLY CHAIN (PART I OF II) Interview conducted by Mira Slott, excerpted from the Perishable Pundit, October 27, 2011

t’s always a special treat to highlight a supply chain that starts on a higher color. Maybe on green grapes, there is yellow in them and they family farm and leads to the fat of a consumer in London. This will tend to shatter. Retailers don’t like to risk shrink. We hear from Iexample epitomizes a seamless supply chain integration and illus- retailers that want rock hard fruit, bright colors and no shatter. I can trates the way aligned supply chains can produce value above and grow those but they won’t taste good, but those are the specs we get beyond commodity shipping. We asked Pundit Investigator and Special from retailers. They’re looking at price and shrink and what you can Projects Editor Mira Slott to find out about a specific U.S. developed measure. It’s hard to measure taste. grape variety, known as Cotton Candy, that recently was marketed in Q: What can you do to alleviate these concerns? How do you make Sainsbury stores in the U.K. First, Mira spoke to the American side of the the case that the benefits outweigh the costs? deal, Jim Beagle, CEO of the Grapery, in Bakersfield, CA. In Part II, Slott A: We get flooded with emails from consumers, saying, wow, I never reaches across the pond to speak with the British side of the equation, email companies but you have the best tasting grapes I’ve ever eaten, Bruce McGlashan, technical manager of Mack Multiples. and so many times they don’t taste good. We don’t get complaints that Q: Could you tell us the back-story behind the Cotton Candy there was too much shatter or they were too ripe. It’s a sign flavor is so variety and its development? important to consumers. When the industry is only driven by shelf-life A: The real background, briefly, is that Grapery is a partnership and price, we miss out on sales and risk disappointing consumers... We between Jack Pandol [of Pandol Bros., Bakersfield, CA] and me, which get emails from consumers asking, "Where can I find your grapes?" was formed in 1989. It dawned on him that as he gave his best fruit to That’s pretty powerful for retailers because it’s a competitive business. friends and neighbors, the feedback was always how wonderful the fruit The dilemma for retailers is they’re also taking on risk buying my tasted. But then they would lament: Why can’t we find this in the store? I product. Will they have fruit that doesn’t have as long a shelf life? They was experiencing the same reactions. lose money when they have shrink. It’s important to have fruit that can That got us thinking of how flavor is of initial importance to last on the shelf. It’s a big hurdle to get over....It takes a whole different consumers. In our dealings with customers, however, flavor is not the approach to buying. It requires different types of partnerships between main focus. Except in rare cases, flavor is not the primary attribute growers, retailers and others in the supply chain. We’ve done things when selling to the shipper. focused more on wholesale. Here’s an opportunity to satisfy the Q: What can you do to fix that disconnect? And where does the consumer, to shift the focus to what the consumer wants. process start? What are the tradeoffs? Do you have to sacrifice other Q: Are you partnering with any retailers that are willing to embrace product characteristics when focusing on flavor? your flavor mission and the risks that come with that because they can A: Obviously, we have to stand by our product, and it requires an envision the ultimate payoff? entirely different mindset. It goes way back to our breeding program. A: Our partnership with Mack Multiples to bring Cotton Candy grapes So a big part of that breeding for flavor involved the University of to the UK exclusively through Sainsbury’s is a case study of what happens Arkansas, which had started a grape breeding program 50 or 60 years when a customer gets engaged. Both companies have been very committed ago to develop a table grape industry in the Southeastern U.S. A lot of to what Grapery has been doing for years with our breeding program. species native to the eastern U.S. are disease-resistant to grow in that Mack Multiples has come and visited many times to see what’s climate, but also have thick skins, decay quickly and have severe shelf- happening. When we have very small volumes of a new product, we’ll life issues. Familiar, traditional grape names were crossed with send a sample box and they’ll put it in test kitchens and evaluate flavor European species, but they never came up with something that worked selections and what would fit to do a program like what I’ve laid out. well for the Southeastern U.S. It’s taken years of developing relationships and experimenting and They decided to cross breed with varieties we grow here. Remark- following through. It involves a little trial and error of what works and ably, we’re getting the flavors of those grapes, combined with what doesn’t. We did a great job of coordinating harvest timing and seedlessness, thin skin and lack of acidity that we have in California. packaging for their market. Cotton Candy comes directly from that cross breeding... Q: Did the marketing effort change to accommodate cultural differ- Q: Cotton Candy grapes are uniquely novel, fun and recognizably ences in the UK? Is Cotton Candy more of an American pastime? distinctive in flavor. In this case, aren’t you starting with an advantage? A: Cotton Candy is called Candy Floss in the UK... It was a very well- A: We’ve got the big Cotton Candy label, but even on regular vari- coordinated, planned-out media campaign leading to a flurry of eties, we have our flavor promise on the bag of grapes across the top... publicity. They did a really good job on how they launched the product. We supplement our product packaging with in-store signage and mate- Sainsbury’s ran a big promotion. rials that tell a story about what we’re doing. Q: When will Cotton Candy be more commercially available and in Q: But getting it on the retail shelf is the first hurdle... Are you what quantities? finding retailers receptive? A: I’m still learning yield levels on Cotton Candy. This summer we A: Our relationships with retailers and distributors are a critical planted our first commercial plot of Cotton Candy that won’t be component. We need to shift gears to the implications for the industry. produced until Aug 2013. For the UK program, we picked the fruit in When we grow out of flavor, we take on risks for the supply chain. late August. There was enough quantity to cover the top stores When we harvest for flavor, we pick at ripeness. Product tends to be throughout the Sainsbury chain.

80 PRODUCE BUSINESS • JANUARY 2012 PRODUCE BUSINESS is accepting nominations for its Eighth Annual 40-Under-Forty Project, which recognizes the produce industry's top young leaders.

Honorees will be selected based on their professional accomplishments, demonstrated leadership and industry/community contributions. To be eligible, nominees must be under the age of 40 as of January 1 (People born after January 1, 1972).

To nominate someone, please fill out this form by March 1, 2012, and fax back to 561-994-1610.

Once nominated, the candidate will receive forms from us to fill out asking for detailed information. A candidate only needs to be nominated one time. Multiple nominations will have no bearing on selection.

ABOUT THE NOMINEE: Nominee's Professional Achievements: ______First Name ______Last Name ______Approximate Age ______Company ______Position ______Nominee's Industry/Community/Charitable Activities: Address ______City ______State ______Postal Code ______Country ______Phone ______Fax ______ABOUT THE NOMINATOR: E-mail ______First Name ______Last Name ______In 100 words or less, describe why this person should be nominated: Company ______(You can use a separate sheet for this) Position ______Address ______City ______State ______Postal Code ______Country ______Phone ______Fax ______E-mail ______

Nominator information is for our use only and will not be shared with candidate or have a bearing on selection. For more information email: [email protected] BLAST FROM THE PAST apple wrapper flappers

With February’s Apple Month fast approaching, it’s a prime time to take a look back at the history of this iconic fruit in British Columbia, with the help of this photo taken in the 1940s, provided by BC Tree Fruits, in Kelowna, British Colum- bia, Canada. While the fruit industry in Canada’s Okanagan Valley has seen many changes during the 20th Century, no change has been greater than that of apple packing. As the marketable quantity of apples rapidly increased with more and more orchards coming into production, men were soon taught the art of packing apples. They attended packing school to learn the properPHOTO techniques COURTESY OF using wooden practice apples. Only then were they allowed near the packing line and the real fruit. In a short time, however, men left their jobs in the packinghouses to fight in World War II, and conceded this occupation to the women who were left behind. Considerable skill and energy was expanded by the young ladies who wrapped and placed the apples into 50-lb. boxes, who were often known to the male employees PHOTO COURTESY OF KELOWNA PUBLIC ARCHIVES: PHOTO NO.7822. as “apple wrapper flappers.” The photo at right shows them hard at work. A good packer could wrap the apples in tissue and pack them perfectly in a wooden box so that the apples wouldn’t bruise during shipping.

The Blast from the Past is a regular feature of PRODUCE B USINESS. We welcome submissions of your old photos, labels or advertisements along with suggested captions. Please send materials to: Editor, PRODUCE B USINESS, P.O. Box 810425, Boca Raton, FL 33481-0425, or e-mail [email protected] INFORMATION SHOWCASE Receive supplier information fast using the Produce Business Information Showcase. Here’s How: JANUARY 2012 Contact the advertiser directly via the Website, e-mail, or phone listed in the ad. COMPANY PAGE # PHONE WEBSITE COMPANY PAGE # PHONE WEBSITE Maurice A. Auerbach, Inc...... 19 ...... 201-807-9292...... www.auerpak.com Limoneira...... 30 ...... 866-321-8953...... www.limoneira.com Baero North America, Inc...... 11 ...... 314-692-2270...... www.baerousa.com Lisa Inc...... 45 ...... 520-281-1863 BelleHarvest Sales, Inc...... 62 ...... 800-452-7753 ...... www.belleharvest.com Mann Packing Company, Inc...... 9 ...... 800-884-6266...... www.veggiesmadeeasy.com Blue Book Services ...... 79 ...... 630-668-3500...... www.producebluebook.com MIXTEC Group ...... 22 ...... 626-440-7077...... www.mixtec.net Boncheff Greenhouses ...... 69 ...... 416-233-6922 ...... [email protected] Mucci Farms...... 69 ...... 866-236-5558...... www.muccifarms.com Booth Ranches, LLC...... 31 ...... 559-626-7653 ...... www.boothranches.com New York Apple Association, Inc...... 59 ...... 585-924-2171 ...... www.nyapplecountry.com Borton & Sons Inc...... 62 ...... 509-966-3996 ...... www.bortonfruit.com Niagara Fresh Fruit Co...... 63 ...... 716-778-7631 ...... www.niagarafreshfruit.com Brooks Tropicals...... 71 ...... 800-327-4833 ...... www.brookstropicals.com Nova Produce, LP ...... 45 ...... 239-444-1140 ...... www.novaproduce.com Capital City Fruit Co., Inc...... 32 ...... 515-981-5111 ...... www.capitalcityfruit.com Omega Produce Company, Inc...... 46 ...... 520-281-0410 ...... www.omegaproduceco.com Center for Produce Safety...... 49 ...... https://cps.ucdavis.edu/ Paramount Citrus Association...... 67 ...... 213-612-9957...... www.paramountcitrus.com/ CF Fresh ...... 52 ...... 360-855-3192...... www.vivatierra.com Pavero Cold Storage Corp...... 63 ...... 800-435-2994 ...... www.paverocoldstorage.com/ Champ's Mushrooms ...... 57 ...... 866-Champs1 ...... www.champsmushrooms.ca PDG Produce ...... 42-43 ...... 520-281-2605 Chilean Avocado Importers Asso. ....67 ...... 202-626-0560...... www.chileanavocados.org/ Pennsylvania Apple Continental Plastic Corp...... 35 ...... 866-811-6510...... www.conplastics.com Marketing Program...... 63 ...... 717-783-5418 ...... www.pennsylvaniaapples.org D'Arrigo Bros. Co. of New York...... 23 ...... 800-223-8080 ...... www.darrigony.com Phillips Mushroom Farms ...... 56 ...... 800-722-8818 ...... www.phillipsmushroomfarms.com Dole Fresh Vegetable Co...... 2 ...... 800-333-5454...... www.dole.com/saladkits Prime Time...... 84 ...... 760-399-4166 ...... www.primetimeproduce.com Double D Farms...... 74 ...... 559-884-2000...... www.doubledfarms.com Produce for Better dProduce Man Software ...... 22 ...... 888-PRODMAN ...... www.dproduceman.com Health Foundation ...... 83 ...... 302-235-2329...... www.pbhfoundation.org Duda Family Farms ...... 27 ...... 559-627-1337 ...... www.dudafresh.com Produce Plus ...... 45 ...... 800-323-3730 ...... www.produceplus.com/ Eclipse Berry Farms, LLC ...... 74 ...... 310-207-7879 ...... www.eclipseberryfarms.com Red Blossom Farms, Inc...... 74 ...... 805-981-1839 ...... www.redblossom.com Edinburg Citrus Association ...... 33 ...... 956-383-6619 ...... www.txcitrus.com Rice Fruit Company ...... 63 ...... 800-627-3359 ...... www.ricefruit.com Florida Department of Agriculture ....28 ...... 850-488-4303 ...... www.freshfromflorida.com Riveridge Produce Marketing, Inc. ....63 ...... 800-968-8833 ...... www.riveridgeproduce.com Fowler Farms ...... 61 ...... 800-836-9537 ...... www.fowlerfarms.com Sambrailo Packaging...... 40 ...... 800-563-4467 ...... www.sambrailo.com Giorgio Fresh Co...... 57 ...... 800-330-5711 ...... www.giorgiofoods.com Southern Produce Distributors, Inc. ....5 ...... 800-688-9267 ...... www.southern-produce.com Grower Alliance, LLC ...... 44 ...... 520-761-1921 ...... www.groweralliance.com Tanimura & Antle, Inc...... 36-37 ...... 800-772-4542...... www.taproduce.com Hess Brothers Fruit Co...... 63 ...... 717-656-2631 ...... www.hessbros.com Texas Citrus Exchange...... 33 ...... 956-383-6619 ...... www.txcitrus.com Inline Plastics Corp...... 39 ...... 800-826-5567 ...... www.inlineplastics.com United Fresh Produce Association ....77 ...... 202-303-3400...... www.unitedfresh.org Jem D International ...... 69 ...... 800-286-0691...... www.jemdfarms.com Well-Pict Berries ...... 74 ...... 831-722-3871 ...... www.wellpict.com Keystone Fruit Marketing, Inc...... 63 ...... 717-597-2112 ...... www.keystonefruit.com West Lake Fresh ...... 74 ...... 831-724-0644 ....www.westlakeproduce.site.aplus.net/site/ Kroeker Farms Ltd ...... 69 ...... 204-325-4333 ...... www.kroekerfarms.com Wholesum Family Farms ...... 51 ...... 520-281-9233 ...... www.wholesumharvest.com LGS Specialty Sales, Ltd...... 29 ...... 800-796-2349...... www.lgssales.com Kurt Zuhlke & Association ...... 38 ...... 800-644-8729 ...... www.producepackaging.com

82 PRODUCE BUSINESS • JANUARY 2012